Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

ESSEX RIVER AND SOUTH ESSEX WATER BILL

[Queen's Consent, on behalf of the Crown signified.]

Bill read the Third time and passed.

WALSALL CORPORATION BILL

WEST BROMWICH CORPORATION BILL

WOLVERHAMPTON CORPORATION BILL

Read the Third time and passed.

WELLAND NENE (EMPINGHAM RESERVOIR) AND MID-NORTHAMPTONSHIRE WATER BILL (By Order)

Consideration, as amended, deferred till Thursday at seven o'clock.

Oral Answers to Questions — MINISTRY OF POWER

Natural Gas

Mr. Lane: asked the Minister of Power what steps he has taken to ensure that advice to consumers on the safe operation of appliances converted to natural gas is adequately publicised.

Mr. J. H. Osborn: asked the Minister of Power what research is being carried out on the combustion of natural gas in domestic appliances, including those suitably modified, to reduce the danger of producing carbon monoxide; and how many deaths and accidents due to this cause have been notified to him to date this year.

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): Gas boards issue new instructions to consumers with conversion sets if operating methods change as a result of conversion to natural gas. Special arrangements have been made for labels giving advice on safe operation to be fixed to water heaters in bathrooms. Research into all aspects of the use of natural gas in domestic appliances, including their safe operation, is carried out at the Gas Council's Watson House Research Station. One death from carbon monoxide poisoning has been reported this year, due primarily to lack of ventilation, not conversion to natural gas.

Mr. Lane: In addition to that, is the hon. Gentleman satisfied that, in the various communications which the area gas boards rightly have with consumers before conversion, enough stress is laid on safe operation?

Mr. Freeson: The important thing is to ensure that consumers are informed on these matters when the appliances are fixed, rather than in the general notices which are received beforehand during the programming of conversion, but I will certainly draw the attention of the Gas Council to the point.

Mr. Gwilym Roberts: Is my hon. Friend satisfied, however, that these conversions are always done by completely competent individuals, particularly when the work is sub-contracted? Are adequate arrangements available for inspection by gas board staff?

Mr. Freeson: On the last point, that is the position. I accept that, in the early stages of these conversion programmes, there have been some difficulties—one should not exaggerate their extent—with the training of certain personnel. Having had close contact with the industry on these matters in recent months, I am persuaded that they have caught up with the problems and that things will improve rapidly from now on.

Mr. Dudley Smith: asked the Minister of Power if he will institute an inquiry into the increased charges being imposed on the consumer in areas where conversion to natural gas has taken place, in view of the official assurance to the


public that natural gas would not cost the consumer more.

Mr. Freeson: No, Sir. There has been no change in gas charges since the general increase over a year ago, which was not related to conversion to natural gas.

Mr. Smith: Is the hon. Gentleman aware that the West Midlands Gas Board has been inundated with complaints about there having been substantial rises in gas bills following the conversion of appliances to natural gas? As all these complaints cannot be based on the increased consumption of gas, is not the slogan "Natural gas is cheaper" something of a confidence trick from the public's point of view?

Mr. Freeson: I suggest that the hon. Gentleman includes that text in his next advertisement in his local newspaper. The probable answer lies in the fact that there was a sharp spell of cold weather earlier this year. Individual bills may, in some cases, have gone up. There is absolutely no evidence to suggest that there has been a general increase in charges as a result of conversion. On the contrary, a number of boards have introduced reductions rather than increases.

Mr. Dudley Smith: asked the Minister of Power what is the rate at which the Board's workmen are recalled to do work again on natural gas conversion in the West Midlands Gas Board's area; and whether he will direct the Board to carry out all legitimate repairs and adjustments, made necessary by faulty conversion, at no cost to the consumer for at least another six-month period.

Mr. Freeson: In the West Midlands Board's area, about 25 per cent. of conversions now need further attention. The Board does not set a limit to the period during which a follow-up service clearly attributable to conversion is carried out free of charge.

Mr. Smith: As members of the public have no choice about being converted, will the hon. Gentleman make it perfectly clear to the Board that it must allow a reasonable time for repairs to be done owing to the abnormal number of callbacks that have been made?

Mr. Freeson: I am not clear for what the hon. Gentleman is asking. I have

indicated—I understand that the Board indicates this clearly in the circular letters which it sends out locally and which I have seen—that where there is a requirement for a follow-up service which is clearly attributable to conversion, there is no time limit on the carrying out of that work free of charge.

Mr. Leslie Huckfield: Will my hon. Friend bear in mind that the West Midlands Gas Board has already given an unequivocal assurance that it will examine any complaints that are made? However, will he please take note of the fact that there is a great deal of constituency concern over this matter?

Mr. Freeson: I am aware of the concern that exists, not only in my hon. Friend's constituency and in that of the hon. Member for Warwick and Learning-ton (Mr. Dudley Smith) but in a number of other constituencies. This is the reason why we have had previous Questions on the subject. I wish to make it perfectly clear that no matter how considerable the number of complaints may seem, taken in toto they represent a very small percentage indeed of the total programme which is being undertaken in Britain.

Mr. Emery: Would the hon. Gentleman in future please take more seriously the complaints that are made by my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) and not deal with such matters lightly or make unnecessary comments? [HON. MEMBERS: "Get on."] Would not the hon. Gentleman agree that a call-back figure of 25 per cent. is high and should be reduced? Is the present call-back rate better than it was a year ago and is the position being improved?

Mr. Freeson: I cannot, off the cuff, quote figures about the earlier position in this programme. Each successive expansion of the conversion programme in the areas of boards is showing a reduction in the call-back numbers. There are bound to be a number of call-backs when thousands of appliances are involved and particularly when, in some instances, boards are coming across appliances of which both the consumers and boards were not aware at the time. I assure hon. Members that there is a progressive reduction in the number of call-backs and that the reduction will continue as the Boards gain experience.

Mr. Woof: asked the Minister of Power what progress is being made in conversion of industrial consumers to the use of natural gas.

Mr. Freeson: Up to 31st March, 1969, nearly 3,000 industrial consumers had been converted; consuming about 45 per cent. of natural gas being supplied direct. A major expansion of the industrial gas market is planned, to increase sales nearly fourfold over the next five years.

Mr. Woof: To what extent have industrial conversions been satisfactory? What success has been achieved in expanding markets particularly in preference to the use of other forms of fuel?

Mr. Freeson: The actual programme works that have been undertaken in the industrial field have proceeded very smoothly. Boards and converting firms have reported satisfaction with the results in papers delivered to technical conferences where representatives have made their views known. As to success in expanding markets, new contracts which have been concluded will build up to more than total industrial sales last year. The contracts for I.C.I. and Shellstar alone account for nearly 1,000 million therms a year.

Mr. Ronald Bell: Will the Parliamentary Secretary persuade the Council to use the highest possible proportion of natural gas for industrial purposes in view of the wide dissatisfaction with the use of this gas for domestic appliances?

Mr. Freeson: I do not accept that there is widespread dissatisfaction with the domestic use. As I said earlier, there have been a minority of cases where problems have arisen and are continuing. On the question of industrial sales the hon. Gentleman is asking the gas industry to do precisely what it is already doing.

Nationalised Industries (Financial Objectives)

Mr. Lane: asked the Minister of Power whether he has now fixed a financial target for the electricity industry for the current financial year.

Mr. Patrick McNair-Wilson: asked the Minister of Power whether he has now fixed a financial target for the coal industry for the current financial year.

Mr. Emery: asked the Minister of Power whether he will make a statement on the financial target for the gas industry for the current financial year and for the period 1969 to 1974.

Mr. Ridley: asked the Minister of Power (1) if he will set identical financial targets for all the industries under his control, expressed in terms of a percentage return on capital employed;
(2) when he will announce the financial targets for the industries under his control.

Sir J. Gilmour: asked the Minister of Power whether he has now fixed a financial target for the coal industry over a period of years in accordance with Government policy as set out in Command Paper No. 3437.

The Minister of Power (Mr. Roy Mason): As regards gas and electricity, I have nothing to add to the reply I gave to the hon. Member for Honiton (Mr. Emery) on 29th April—[Vol. 782, c. 1134]. On coal, I hope to make a statement fairly soon. The financial objective of the British Steel Corporation is under consideration following the Report of the N.B.P.I. on steel prices.

Mr. Lane: But what is the point of a target if it is not fixed and announced well before the financial year to which it relates?

Mr. Mason: The hon. Gentleman makes a good point, but we have had to work within the framework of Cmnd. 3437, which has set difficult criteria, and we have had to have a fresh round of talks with all the nationalised industries before we could establish it. We are a month or two late, but it is for five years, so there is no urgency in that respect.

Mr. McNair-Wilson: But would not the right hon. Gentleman agree that, in the absence of a target, there is no way of knowing whether these industries are being effected, and that his answer to my hon. Friend is no answer at all? Why has there been this delay?

Mr. Mason: For precisely the reasons which I gave to the hon. Member for Cambridge (Mr. Lane).

Mr. Emery: Does not the right hon. Gentleman realise that, if the targets


should be altered from anything which has existed so far, the chances of the industries being able to make any alteration in management policy now which will be effective during this first year is almost minimal, and that we must know, before 25 per cent. of the year is through, or else it does not mean a thing?

Mr. Mason: But, in view of the fact that the chairmen and the boards of the various industries are in consultation with the Treasury and my Department, they are fully aware of the trend and of what the financial target will eventually be.

Mr. Ridley: Since Cmnd. 3437 was published in November, 1967, what on earth have the Government been doing since then, when they announced their intention to set targets for all the industries? Would the right hon. Gentleman say if he is now prepared to set targets on the same basis; that is, a return on net assets for all the fuel industries?

Mr. Mason: The answer to the second part of the hon. Gentleman's supplementary question is that I cannot give such an assurance. They may vary. The answer to the first part is that Cmnd. 3437 set very difficult criteria to follow. It has, therefore, taken some time to finalise this matter. I hope, however, that we will be able to set them all and I also hope that we will be able to let the House know about this before the Summer Recess.

Wilson Committee (Report)

Sir J. Eden: asked the Minister of Power whether he has now finished his consideration of the Report of the Wilson Committee, Command Paper No. 3960; and if he will make a statement.

Mr. Mason: No, Sir. So far as the future is concerned, the principal conclusions relate to the avoidance of excessive fluctuations in the C.E.G.B.'s plant programme and the rôles of the C.E.G.B. and the nuclear consortia. These matters require considerable study and consultations and some time must elapse before long-term solutions can be concerted.

Sir J. Eden: Is the right hon. Gentleman able to give an indication of when

he is likely to take steps to meet some of the points that were raised, particularly those relating to uneconomic manning arrangements by the C.E.G.B.?

Mr. Mason: If the hon. Gentleman has read the Report, as I am sure he has, he will know that the Wilson Committee suggested that a number of short-term measures were needed and that remedial steps were being taken by the C.E.G.B. and others. As soon as I have anything to announce from the point of view of longer-term solution, I will inform the House.

Mr. Lubbock: Would the right hon. Gentleman consider what effect the delay in plant ordering may have on the finances of the contracting industry? May not this result in higher tendering costs later? Could not these higher costs be avoided by ordering a power station in the next year?

Mr. Mason: I assure the hon. Gentleman that this matter is very much in our minds. The part of the hon. Gentleman's supplementary question concerning the possible effects of this on plant manufacturers is really a matter for my right hon. Friend the Minister of Technology rather than for me. I am sure that the hon. Gentleman is aware how all this came about. We have a margin of generating capacity of at least 17 per cent. because in the early '60s hon. Gentlemen opposite when in power, did some bad planning and bad forecasting which caused the bunching of orders, and we therefore have this excess.

Electricity and Gas Charges (Privately Installed Meters)

Sir J. Eden: asked the Minister of Power whether he has completed his consideration of measures to protect from overcharging those who consume electricity through privately installed meters; and what steps he proposes to take.

Mr. Boston: asked the Minister of Power whether he will now introduce legislation to make it a criminal offence to overcharge for the resale of electricity and gas.

Mr. Freeson: My review is not yet complete, but I am determined to find a solution.

Sir J. Eden: Did not the hon. Gentleman say as long ago as December, 1967 that he was awaiting further evidence? Is not he aware of the Consumer Council's recent survey in Sheffield? What further evidence does he want before deciding how to act?

Mr. Freeson: The answer to the first point raised in the hon. Gentleman's supplementary question is that I do not recall undertaking a review of possible legislation in December, 1967. I am aware, in answer to the second point, of the survey which was conducted in Sheffield, in addition to other inquiries that have been, or are being, made because I was largely responsible for their initiation.

Mr. Boston: Does my hon. Friend agree that there is cause for concern and a need to obtain the fullest information before the extent of the problem can be fully measured? What consideration is he giving to having a thorough survey into the issue?

Mr. Freeson: I assure my hon. Friend that we have given thought to undertaking a survey to get more detailed and comprehensive information about the problem. However, we have come to the conclusion that, at least for the present, we have enough information to justify our taking action without spending further time and money conducting a survey Nevertheless, I appreciate that we may have to look at this matter again later.

Mr. Crouch: Why should the Minister even talk about the possibility of spending further time and money conducting a survey when the Consumer Council, which is designed to protect consumer interests, has already carried out such a survey, which revealed some important facts; for example, that a large number of students do not know who owns the meters, what rate is charged or that a fixed rate has been set by the Electricity Council?

Mr. Freeson: I am not clear about what the hon. Gentleman is asking me. He began by asking why we needed a survey and went on to say that a survey had already been conducted. I explained that we had sufficient information on which to act because of the facts that had been put before us.

Mr. Crawshaw: Is my hon. Friend aware that the best means of dealing with this problem would be to make it a criminal offence?

Mr. Freeson: We are considering how we could in practice apply control, or the kind of legislation that would be appropriate. It is not the principle that is being queried.

Mr. Silvester: asked the Minister of Power what consultations he has had with interested bodies on possible ways of preventing over-charging for electricity consumed through privately installed meters.

Mr. Alexander W. Lyon: asked the Minister of Power whether he will now introduce legislation to enforce the maximum resale prices of electricity and gas by the respective boards.

Mr. Freeson: I would refer hon. Members to my reply of 10th June to the hon. Member for Canterbury (Mr. Crouch) [Vol. 784, c. 227].

Mr. Silvester: Would it not be a good idea, in respect of privately installed meters, to require compulsorily that the local maximum rate should be given to the tenant and also the rate at which the meter has been set? Should that not be done fairly quickly?

Mr. Freeson: We have discussed over quite a period methods by which there could be greater publicity given, not only to the maximum charges but also about advice from consultative councils and the like, which would' enable consumers to read their own meters more easily and to establish whether they are being overcharged.

Mr. Alexander W. Lyon: Would my hon. Friend consult with local authority bodies to see whether there is any prospect of enforcing the present legislation through the media of local government inspectors, who would be doing their normal work in relation to housing of a poor nature?

Mr. Freeson: We have not embarked on any consultations with the local authority associations on this matter. We are in touch with my right hon. Friend the Minister of Housing on the possibility. In the meantime we have been


looking at the various ways in which this matter might be pursued legislatively, and I have asked the consultative council chairmen and their members to make inquiries locally with local authority health officers and the like to see how best they envisage this matter being handled before we come to conclusions on it.

Economic Commission for Europe and O.E.C.D.

Mr. Gardner: asked the Minister of Power what contributions his Department makes to the work of the Economic Commission for Europe and the Organisation for Economic Co-operation and Development.

Mr. Mason: The O.E.C.D. and E.C.E. provide for the international discussion of a wide range of problems relevant to my Department's work, such international discussion can yield useful dividends and my officials play a full part in the work of these bodies.

Mr. Gardner: Can my right hon. Friend give some further information about the studies in which these bodies are engaged? Can he say whether he has reached any conclusions on the likely effects for the British domestic fuel industry of British membership of the E.E.C.?

Mr. Mason: Some of the recent studies the Economic Commission for Europe has in hand include new uses for steel. It is also arranging a conference on a long-term market for coal. As to other fuel uses, there is the long-term look at supplies of coking coal. This is a joint study between this country and the European Coal Commission.

Electricity and Gas Meters (Reading)

Mr. Gardner: asked the Minister of Power what further progress has been made with studies of joint reading of electricity and gas meters; and if he will make a statement.

Mr. Freeson: I understand that the Gas and Electricity Councils doubt whether the outcome of their joint studies would justify further action, but I am awaiting their detailed findings, which the Department will examine closely before my right hon. Friend the Minister comes to a conclusion on the matter.

Mr. Gardner: Is my hon. Friend aware that part of his Answer will cause great concern? Is he aware that if it were possible to have joint meter reading that would lead to very great savings? Is he aware of the concern about primary charges imposed by gas boards in some regions?

Mr. Freeson: The latter point is not particularly related to joint meter readings. On the question of savings this is a possibility. One thing I learned about before the industries were asked to look at this matter more thoroughly was that there had been close integration of accounting with other managerial techniques involved with computerisation. This is not to pre-judge what is to happen. The councils have been giving us no more than their bare conclusions. I ask hon. Members to await further considerations of this matter.

Mr. Gwilym Roberts: asked the Minister of Power what is the estimated proportion of homes where electricity and gas meter readers are unable to obtain access during the day as the family are all out; and what is the estimated economy from sending meter readers out mainly in the evenings.

Mr. Freeson: This is a matter for the two industries, and I am asking the two Councils to write to my hon. Friend.

Mr. Roberts: Is my hon. Friend aware that at the recent annual conference of service managers in the private sector, stress was laid on the need to move servicing and maintenance generally to the evenings because of the greater number of people who are at home at that time? Will he ask the industries concerned to give this matter very serious consideration?

Mr. Freeson: I was not aware of the conference to which my hon. Friend has referred. As I have said, I have asked the Councils to look at this and I shall write to my hon. Friend when I know what they say.

Mr. Ogden: Is my hon. Friend aware of a common practice in the United States where the meter box is set into the outside wall of the house and can be read from outside by the use of a special key, whether anyone is in the


house or not? Will he have consultations with the Minister of Public Building and Works on this?

Mr. Freeson: That is a suggestion which has been looked at time after time over a number of years and has been adopted by some local authorities and private developers, but it rests very largely in their hands and not in the hands of the industries. It is a matter for the developers, private or public, on which they can make further research and possible development.

District Heating (Incineration Plants)

Mr. Gwilym Roberts: asked the Minister of Power what is the result of his consultations on the use of household and industrial refuse as a source of energy for domestic and industrial district heating; and what steps he is now taking to co-ordinate the collection of refuse to use for heating purposes.

Mr. Freeson: Government Departments are co-operating in the examination of district heating policy on a continuous basis, including the incorporation of incineration plants in such schemes. If my hon. Friend wishes to have information about particular schemes I will do my best to help him.

Mr. Roberts: Would not my hon. Friend agree that the progress of local authorities towards district heating has been very slow, and towards district heating based on refuse almost nil? Does he accept that tens of millions of pounds could be saved in this way and that we are falling behind some European countries in these developments?

Mr. Freeson: I think there is little doubt that in many respects we are behind certain Western European countries in this connection. As to past experience, it is true that relatively little has been done in this country, but recently there has been a considerable growth of interest in this field, both in public and private undertakings, and the Department wishes to encourage it.

Mr. Lubbock: Is not one of the difficulties that local authorities have not adequate powers to implement district heating schemes and they have to intro-

duce private Bills if they are to make progress? Will the hon. Gentleman and the Department seriously consider introducing a national programme to encourage local authorities to make progress in this matter next Session?

Mr. Freeson: I appreciate the points made by the hon. Member. I take it that he was referring to the provision of services under public highways and the like. He should put that question before the Ministry of Housing and Local Government.

Scotland (Prices)

Mr. Edward M. Taylor: asked the Minister of Power what is the average price of smokeless fuel in Scotland and England, respectively.

Mr. Dalyell: asked the Minister of Power if he will give details of prices of smokeless fuel in Scotland and England, respectively.

Mr. Freeson: I have nothing to add to the reply I gave the hon. Member on 4th February, 1969.—[Vol. 777, c. 202.]

Mr. Taylor: It is about time the Parliamentary Secretary said that he did not have the information. Is it not absolutely disgraceful that when the Ministry, in conjunction with N.B.P.I., decides on increases in fuel prices he should not even have detailed information on the prices paid by people on such a very important basic item of the family budget, particularly in smokeless areas? Will he try to find out some facts?

Mr. Freeson: The hon. Gentleman should cease his bawling, even if it is rather quiet. He has misquoted what I said on the last occasion that the Question was put to me. I then said:
There is such variation in the prices as between different smokeless fuels, individual retailers towns and cities in different parts of the country, mainly reflecting transport costs, that it is not practicable to give accurate averages."—[OFFICIAL REPORT, Vol. 777, c. 202–3.]

Mr. Dalyell: Is it not very expensive for the Civil Service to produce such figures as these?

Mr. Freeson: It is not a question of expense to the Civil Service. It is a question of practicability.

Mrs. Ewing: Is the Parliamentary Secretary aware that the cost of smokeless fuel is high in Scotland and that as long as we have the United Kingdom we should at least have the benefit of prices that are no higher than United Kingdom prices?

Hon. Members: Oh!

Mr. Freeson: I think that the hon. Lady has already had her answer. My only additional comment would be that this is very largely a question for the merchants. Unlike other fuel industries such as gas and electricity, the distribution is in the hands very largely of individual merchants who range in size and number considerably throughout the country.

Mr. Edward M. Taylor: asked the Minister of Power by what percentage the price of gas for domestic consumption in Scotland exceeded the price in England and Wales in the most recent annual period for which figures are available.

Mr. Freeson: Average domestic revenue per therm in Scotland in 1967–68 was 31.·5 pence. This was about 30 per cent. above the average for England and Wales, but lies within the range of variation for individual boards in those countries.

Mr. Taylor: Can the Parliamentary Secretary explain why the price of gas in Scotland in 1964 was 13 per cent. more than the average in England and Wales and why in every year since then it has increased until Scotland is now, according to his figures, paying about one-third more for gas compared with the average for England and Wales? When will there be a reverse of this trend?

Mr. Freeson: The costs of production are different. That comment applies to the previous Question, too. I do not think that the hon. Gentleman listened sufficiently carefully to my Answer. The last part pointed out that this 30 per cent. difference lay within the range of variation for individual boards in England and Wales.

Mr. Ridley: Since gas is hardly made from coal at all, what is the new factor making for higher costs in Scotland? Will the Parliamentary Secretary have an inquiry into this matter, because it seems no longer to bear any relevance to costs?

Mr. Freeson: A very large part of the difference in the cost of gas production in Scotland arises besause there is a much lower average density of population than that in the country as a whole and therefore the servicing of supplies to widespread communities is higher, as indeed it is in other similar parts of the United Kingdom.

Mr. Taylor: On a point of order. In view of the highly unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.

Steel Prices

Sir G. Nabarro: asked the Minister of Power whether he will now make a statement on revised steel prices and their estimated effects on steel imports which continue to rise.

Mr. Biffen: asked the Minister of Power if he will make a statement on the recent recommendations by the National Board for Prices and Incomes on steel price increases.

Mr. Mason: On the general issue I have nothing to add to the statement I made in the House last Thursday. As regards imports, the Corporation expects the price increases to have little effect, since comparable or greater increases have already occurred abroad.—[Vol. 784, c. 1679]

Sir G. Nabarro: Why is the Minister conspiring—[HON. MEMBERS: "Oh."]—"conspiring", I said—with the British Steel Corporation to frustrate the policy of his own Government in the matter of import substitution? Is he not aware that iron and steel imports account for hundreds of millions of £s annually, much of which could be substituted by home-produced steel if his own policy in pricing were realistic and strictly applicable to our current position?

Mr. Mason: It is not possible to find import substitution for the variety of steel products that enter this country, but the hon. Gentleman should know that a good percentage of what is imported is re-rolled and re-exported.

Mr. Biffen: Is the Minister aware that there will be widespread support for his disregarding the recommendations of


the National Board for Prices and Incomes on the actual implementation of the scaling down of the proposed increase but that this raises the much more important question as to whether that detailed application was the recommendation of Booz-Allen, the consultants employed by the Board, or was a recommendation superimposed by the Board's permanent staff on the consultants' findings?

Mr. Mason: I do not see any reason why we should drag through this House the report by Booz-Allen, the consultants who looked into this question. I do not think that it would be right and proper.

Mr. John Mendelson: Does not my right hon. Friend agree that action is needed with regard to imports of steel? Why are the Government and the Corporation not proceeding with a policy of stocking steel at times of less demand in accordance with the recommendation of the Standing Committee which considered the nationalisation Bill, on which the Minister promised to act?

Mr. Mason: This is under consideration. On stocking, my hon. Friend must know that in my statement last week on the pricing of small extras we agreed that we would encourage the Corporation to make longer runs and therefore increase its efficiency in that respect and that in regard to short orders we would encourage stockholders and stockists to take more. That is a useful first step.

Mr. Hooley: Does not the solution to the import problem rest in having adequate home capacity? Can my right hon. Friend give an assurance that the reduction in the requested increase following the acceptance of the National Board's recommendation will not in any way adversely affect the forward investment programme of the Corporation?

Mr. Mason: This is what we must try to avoid. My hon. Friend is right on the question of home capacity. One of the problems is that the Corporation must quickly iron out many of the bottlenecks in production and thereby be able to cut back on imports.

Sir K. Joseph: As the Minister seems implicitly to accept that there was a conflict between the advice of the con-

sultants Booz-Allen and the recommendation of the Prices and Incomes Board, will he lay the report of Booz-Allen before the House?

Mr. Mason: I have not got the report. I am only aware of it. I have not seen the Booz-Allen report, but I am generally aware of what it contains. It is not within my province to lay that report before the House.

North Sea Gas

Sir G. Nabarro: asked the Minister of Power whether he will now make a statement on the imports substitution value of North Sea gas for 1969–70 and the prospects for the 1970s; how much imported and how much indigenous fuel is replaced by North Sea gas; and to what extent the total potential has now been exploited.

Mr. Freeson: The estimated net foreign exchange saving from North Sea gas remains about £50 million in 1970 rising to about £100 million in 1975. The gas will mainly replace oil.

Sir G. Nabarro: Is that the maximum capacity of all the North Sea gas fields, and is it capable of increase in the next five years in the interests of making a more dynamic contribution towards our balance of payments and relieving the burden of imported fuels by indigenous-produced fuels?

Mr. Freeson: On the latter point, this is something which we are intending to aim for, with the speedy absorption of natural gas into the country's economy. On the question of future capacity of natural gas supply from the North Sea, I believe that there is a further Question down on the Order Paper.

Mr. Hector Hughes: Does that Answer not refer to a conflict between imported gas and indigenous gas, contrary to the national interest and contrary to the balance of payments? Will the Minister take steps to encourage the use of the indigenous gas?

Mr. Freeson: North Sea gas is indigenous gas and to the extent that it can be brought into the country's economy it will replace gas produced by oil conversion, thereby assisting our foreign exchange position.

Energy Industries (Price Increases)

Mr. Emery: asked the Minister of Power upon what criteria he decides whether to refer to the National Board for Prices and Incomes a proposal for a price increase by one of the nationalised energy industries.

Mr. Mason: A proposed price increase will be referred to the N.B.P.I. when, in the Government's view, it is a major one or where there are other circumstances which make investigation by the National Board desirable.

Mr. Emery: How does the Minister equate this with the reasons given by the Prime Minister in 1967, when he suggested that it was necessary to take into account the industry's financial objectives? As we do not have the industry's financial objectives for the future, how can any reasonable references be made to the N.B.P.I.?

Mr. Mason: That is why I specifically said earlier in Question Time that the financial objective of the National Coal Board should be settled quite soon, and of course, before the N.B.P.I. reports.

Oral Answers to Questions — COAL

Price Increases

Mr. Patrick McNair-Wilson: asked the Minister of Power if he will make a statement about the price increases which have been proposed to him by the National Coal Board.

Mr. Waddington: asked the Minister of Power (1) whether he will refer to the National Board for Prices and Incomes the National Coal Board's proposals for increases in coal prices;
(2) what representations he has received about proposals to increase coal prices; and if he will make a statement.

Mr. Mason: The proposals have been referred to the National Board for Prices and Incomes.

Mr. McNair-Wilson: Would not the right hon. Gentleman agree that since the Government have always shown such an interest in prices, it would have been wiser for them to have got the pricing policy of the N.C.B. right before having these prices considered?

Mr. Mason: I assure the hon. Gentleman that we could not have held this matter back when a noticeable increase was involved. This has a bearing on our ruling and on the statement which my right hon. Friend the Prime Minister made more than a year ago; and it was necessary for us to refer the matter to the Board.

Mr. Waddington: Will the Minister ensure that there are adequate consultations prior to the publication of any report, since there is to be a reference, so that there will not be a repeat performance of the chaos which followed the conclusions of the P.I.B. on steel prices?

Mr. Mason: While not accepting the hon. Gentleman's comments in this connection, I remind him that there are always adequate representations. As he knows, the private sector, ship builders and those representing the car industry made representations about steel to the P.I.B. In connection with coal, I have already received representations from the Domestic and Industrial Coal Consumers Councils, the coal distributors and the C.E.G.B.

Sir G. Nabarro: What is the right hon. Gentleman doing to prevent leapfrogging occurring between coal and steel? Is it not a fact that steel prices have recently risen by almost 10 per cent. and that increases in coal prices are pending? Shall we not, in a few months' time, have a further demand for increased steel prices consequent on the further increased coal prices?

Mr. Mason: I do not know to what extent I can answer the hon. Gentleman's supplementary question in full because, as usual, he has got his figures wrong. Between 1961 and 1968 the general average increase for steel was 10 per cent.—

Sir G. Nabarro: What about 1969?

Mr. Mason: —and the increases which I announced last week averaged 5·2 per cent.

Mr. Ronald Atkins: Is it not true that steel prices of our leading competitors have also increased and our increases are by no means excessive?

Mr. Mason: My hon. Friend is absolutely right, but I could not pursue


that now because this is a question about coal and there are plenty of questions about steel on the Order Paper.

Sir G. Nabarro: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

Coal Stocks

Mr. Woof: asked the Minister of Power how the present level of coal stocks compares with that of a year ago.

Mr. Mason: Undistributed stocks are down by more than 5 million tons.

Mr. Woof: Although we are all glad to hear that figure, could my right hon. Friend explain a little further some of the factors which have brought about that fall in coal stocks?

Mr. Mason: It is mainly because the Government special support for coal burning in power stations and gas works has already caused an extra 7 million tons of coal to be burned.

Mr. Scott-Hopkins: Can the right hon. Gentleman give an assurance that there will not be a shortage of domestic coal in the coming winter months because power stations are having to take extra coal owing to the failure of the new modern type of work?

Mr. Mason: I can give that assurance because production is going up and stocks are still high.

Mr. Ogden: Does my right hon. Friend agree that the stocks would have been less if we had been able to persuade Lancashire County Council not to convert 200 schools from coal-fired to oilfired at the cost of two Lancashire pits? Can he persuade more local authorities to use modern methods of solid fuel direct heating?

Mr. Mason: My hon. Friend is quite correct. There are instances in the heart of coalfields where it is still possible to burn coal and the Government went out of their way to give a direction that in all Government establishments, even if coal is 5 per cent. dearer than oil, coal should be burned.

Yorkshire Coalfield (Boundaries)

Mr. Ashton: asked the Minister of Power in view of the Hunt Committee

Report, if he will define the precise area of the Yorkshire Coalfield and to what extent it will be treated as continuing into Nottinghamshire and Derbyshire when the areas to receive new assistance are determined.

Mr. Mason: I must ask my hon. Friend to await the statement on intermediate area boundaries that will shortly be made by my right hon. Friend the Secretary of State for Economic Affairs.

Mr. Ashton: Do not the traditional boundaries as observed by the National Coal Board extend into Worksop where there are three collieries, part of the Yorkshire Coalfield, and did not this situation exist long before nationalisation?

Mr. Mason: That may well be so, but the Hunt Committee was referring to the planning sub-region of the Yorkshire Coalfield and not necessarily to the geological coalfield.

Coal Exports (Undistributed Stocks)

Mr. Speed: asked the Minister of Power if he is satisfied as to the action being taken to promote coal exports from undistributed stocks; and if he will make a statement.

Mr. Mason: Yes. Some stock is unsuited or ill-located for export sales, but it may replace other supplies which can then be exported. Undistributed stocks are 5 million tons lower than they were a year ago.

Mr. Speed: Does the Minister expect that exports in the current year will reach 3 million tons and next year will reach 5 million tons, as forecast in the National Coal Board's accounts, because these figures are considerably above the forecast in the 1967 Fuel White Paper?

Mr. Mason: I cannot guarantee that those figures will be achieved, but already in the first five months of 1969 1½ million tons of coal have been exported, 60 per cent. more than that exported in the first five months of 1968.

Smokeless Fuels

Mr. Probert: asked the Minister of Power what was the total demand for smokeless fuels last winter; and how this compares with demand in the previous winter.

Mr. Freeson: Domestic demand was up a little at 4¾ million tons.

Mr. Probert: In view of the continuing decline of gas coke production, are there any plans for increased production of other smokeless fuels?

Mr. Freeson: Yes. Last winter the N.C.B. and private producers stepped up sales by 0·6 million tons and both sectors have major expansion programmes ahead.

Mr. Patrick McNair-Wilson: The Minister will be aware that there is grave concern about shortages both for the domestic market and for the steel industry. Can he give an assurance that there will be no crisis as a result of the shortages of coke in the coming twelve months?

Mr. Freeson: The Question relates to something more than just coke. There is a wide range of smokeless fuels available. I am confident that the gap left by the phasing out of gas coke will be filled adequately, although there are bound to be from time to time local shortages which will have to be made up by alternative fuels.

Sir J. Eden: The Parliamentary Secretary should not be too complacent about the coke situation. Are there not indications that there might well be later this year grave shortages of metallurgical coke?

Mr. Freeson: The Question relates to smokeless fuels. I have answered that Question and have not concerned myself with a question which did not arise on industrial fuels.

Colliery Waste Materials

Mr. Probert: asked the Minister of Power if he will make a statement on the use of colliery waste materials.

Mr. Mason: An increasing amount of colliery shale is being used in roadway construction, mainly as a result of black shales being now found acceptable as a satisfactory base-fill material. A further notable use has been in construction projects such as the International Hoverport at Pegwell Bay.

Mr. Probert: Can the right hon. Gentleman say what new uses are being found

for these waste materials and whether disposals are increasing or decreasing?

Mr. Mason: There is a very encouraging development. Where previously these burnt-out spoil heaps could only be used when they consisted of red shales, it is now possible for black shales to be used, and experiments are being carried out with them. Disposal of colliery shales has gone up from a level of about 5 million tons in recent years to 6·7 million tons in 1968–69.

Consumption

Mr. Speed: asked the Minister of Power if he will estimate the extra annual consumption of coal for each additional 1 per cent. rate of growth in the gross national product.

Mr. Mason: This depends on a number of factors, including the composition of the increase, and I do not think that I could usefully offer such an estimate.

Mr. Speed: Would the Minister not agree that the disposals in coal last year were 6 million tons below the National Plan forecast for 1970? Is it not a fact that if the growth rate between 1960 and 1964, or the National Plan growth rate had been maintained, many colliery closures and redundancies would have been averted?

Mr. Mason: The hon. Gentleman refers to the gross national product increase. As I say, it depends upon how this is made up. This also applies to the increase in coal consumption. It may be that there may be quite a drive for clean air zones, and there will be extra grants for smokeless fuel. There may be a decision taken to build another coal-fired power station, which would require 4 million tons to 5 million tons of coal a year. There are too many unquantifiables in this.

Oral Answers to Questions — T.U.C. REPRESENTATIVES (MEETINGS)

Mr. Marten: asked the Prime Minister if he will convene another meeting with representatives of the Trades Union Congress under his chairmanship.

Mr. Winnick: asked the Prime Minister if he will convene a further


meeting with the Trades Union Congress General Council.

Mr. Cordle: asked the Prime Minister what plans he has for holding further meetings with representatives of the Trades Union Congress.

The Prime Minister (Mr. Harold Wilson): I am having another meeting with representatives of the Trades Union Congress tomorrow.

Mr. Marten: Does the Prime Minister realise that Parliament, as opposed to the Press, has been told very little in the last few weeks about his negotiations with the T.U.C.? Could he, before this meeting tomorrow, perhaps bring Parliament up to dale, particularly on two matters? First, could he confirm his belief in the need for penal sanctions, and, second, could he confirm that it is still essential to get the legislation by the recess?

The Prime Minister: The negotiations are going on, and no one in the House will under-rate the importance of them. I would not want to say anything at this stage that will make them more difficult than they are. With regard to those Clauses referred to in the White Paper, dealing with fines against men on strike unconstitutionally, I have made clear throughout, and repeated it to the T.U.C., that the Government will be prepared to consider dropping them if there is something equally effective in the T.U.C. proposals. If the Government were to decide that, having regard to the immense advance the T.U.C. has made—and it has made a very big advance in these matters—we could drop the idea of legislation in that area, it would, in our view, be necessary for the T.U.C. to legislate in its rules.

Mr. Winnick: Is the Prime Minister aware that virtually every enemy of the trade unions and the Labour Party is hoping that no agreement will be reached tomorrow between the Government and the T.U.C.? Is he also aware that fines or court action of any kind cannot improve industrial relations, and are quite unacceptable to the Movement?

The Prime Minister: I am not interested in what our enemies may think in this matter. What I am concerned with is getting a satisfactory agreement that

can be justified to this House and to the country. Such an agreement will need to build very substantially on what the T.U.C. has done in "Programme for Action". Certainly we cannot solve these problems by any kind of rule alone or legislation. Big changes in attitude are needed, and that is the basis of the White Paper and the T.U.C.'s "Programme for Action". We cannot do it by legislation alone; we cannot do it by long-range changes in attitude alone. Therefore, it is necessary that we have means of ensuring that when men are on strike in defiance of agreed procedure and machinery they should go back to work so that negotiations can continue. That is really what the argument is about.

Mr. Cordle: Do the Government intend introducing further White Papers on their amended plans for trade union reform, or can we take it that the main proposals in "In Place of Strife", including penal sanctions, still stand?

The Prime Minister: The hon. Gentleman perhaps did not hear the answer I gave to his hon. Friend the Member for Banbury (Mr. Marten). As soon as we are in a position to make statements to the House, we shall do so. The White Paper was put forward, and approved by the House. We have stated what are the conditions under which we are prepared to drop fines on individual strikers. We should not do so unless there was something at least equally effective in their place.

Mr. Ashley: Is my right hon. Friend aware that some of us who support the White Paper on industrial relations now believe that a new situation exists, and that the Government have persuaded the T.U.C. to take action on unofficial strikes, and that a satisfactory settlement can be achieved, provided that the General Council will not only circularise member unions with new proposals on Rule 11 but agree to recommend those proposals to the full Congress in September?

Hon. Members: Hear, hear.

The Prime Minister: I know that my hon. Friend has always supported the White Paper. I am not quite sure that everyone who said "Hear, hear" has fully supported the White Paper in the past. As to progress made by the T.U.C.,


it is my view that what it has done with respect to inter-union disputes is an historic step forward. What it has proposed there goes much further forward than ever before, and it is enshrined in the Amendment to Rule 12, which makes a T.U.C. General Council decision on inter-union disputes totally binding on all affiliated organisations. Where I believe it cannot be said that it has gone far enough is in relation to unconstitutional disputes which do not arise from inter-union issues. That is the issue on which we are negotiating.

Mr. Heath: Can the right hon. Gentleman say whether he has yet decided on a final date by which he will make the Government's conclusions known to the House, and when the Bill will be published? Could he also say whether it is still the intention to carry this legislation through in this Session?

The Prime Minister: I cannot say what the final date is. The right hon. Gentleman will know that when there is a question of negotiations, it is sometimes necessary to spend longer in the negotiations. This we are prepared to do as long as we are moving forward. For that reason also I cannot give any clear statement today about the timing of legislation. I will give the right hon. Gentleman an assurance that we will not drag it out for 13 years and then do nothing, as he did.

Mr. James Hamilton: Is my right hon. Friend aware that there is a recognition, at least on this side of the House, that he and his right hon. Friend have performed a very good job in getting the T.U.C. for the very first time to accept responsibility at central level? Is he also aware that all Governments worthy of the name should at all times accept the advice of the T.U.C.? Bearing that in mind, surely he will continue to have discussions with it in the interests of the community and of solving industrial disputes?

The Prime Minister: I thank my hon. Friend for what he said and the spirit in which he said it. I think he will be the first to agree that if we had not tabled the White Paper we should not have made this progress, which I believe, and have said so publicly, is so important. The T.U.C. has gone further in the matter of the transfer of sovereignty and

power to make decisions in a month than in the last 40 years. I would certainly agree with my hon. Friend as to the progress made. I must again say to the House that, while the progress it has made in inter-union disputes would meet the requirements of practically all of us in the House in terms of the binding decisions that it is now in a position to make, I cannot say the same to the House in respect of unofficial disputes, of which there are new ones almost one every day, arising from issues other than inter-union difficulties.

Dr. Winstanley: May we take it that this announcement of a further meeting with the trade union leaders indicates that the Government are at last considering heeding the advice given regarding the dangers of penal sanctions in the Donovan Report, which they have hitherto ignored?

The Prime Minister: Naturally, the Donovan Report has been taken into full account in all these discussions. We have gone back many times to it and sought fresh ideas that can be used here. It is one thing to say that we all want to avoid penal sanctions. I want to do so, and so do most hon. Members. It is quite another thing to say that if we cannot provide a satisfactory alternative we should do nothing.

Mr. Howie: Is my right hon. Friend aware of the very wide range of opinion on this matter on all sides, and does he agree that in the middle of the negotiations now going on it is perhaps time for a moratorium on detailed questions which might lead him to take up a position in reply of too much rigidity?

The Prime Minister: I am not sure that it is correct to say that we are in the middle of negotiations. We have had a very large number of meetings, and I am prepared to continue them as long as they are making progress, as they certainly were in the earlier meetings. At present, the position is as I have described it. If we can make further progress, I shall be glad to do so.
I do not think my right hon. Friend and I can be accused of rigidity, in that last Thursday we made it clear that we were prepared to recommend the dropping of—indeed, to drop in their entirety—these proposed Clauses dealing with fines, the attachment of wages and the


rest, if the T.U.C. would take full responsibility itself for dealing with them, rather than certain generalisations which we welcome but which do not go far enough.

Sir D. Renton: Is the Prime Minister aware that during those 13 years of Conservative government to which he referred, in spite of strikes, the economy grew from strength to strength and the standard of living of the people rose each year, and that it is the Government's mishandling of the economy in recent years which makes trades disputes legislation more necessary and urgent?

The Prime Minister: Obviously, the right hon. and learned Gentleman has not read the statements of his own leader, who called for an urgent Bill on this before last Christmas, despite himself having turned down a Royal Commission on the question in 1960 when he was Minister of Labour. [Interruption.] We set up a Commission very soon after we came to office. If it had been set up in 1960, we should have had its report when we came to office. That is what the right hon. and learned Gentleman, who was a member of the Government from time to time during that period, really ought to understand.

Mr. Horner: Does my right hon. Friend accept that many hon. Members on this side of the House were pleased to hear him say today that what is important is not a change of rule but a change of attitude? That being so, will he also accept that the Government's insistence upon writing the rules of the T.U.C. for it and their refusal to accept a directive couched in almost identical terms is regarded by many hon. Members on this side as obstinacy which is likely to lead to a breakdown in the negotiations? We hope that the Government will think again.

The Prime Minister: I have heard no suggestion of the directive mentioned by my hon. Friend in the terms of these negotiations. What I say in reply to my hon. Friend's welcome to what he thought I said is that rules alone, whether they be legislative rules of this House or of Congress in terms of Rules 11, 12 and 13, will not solve the problem. What is needed is all the changes in attitude, improvements in procedure, in agreements, and so on, which inspired a large

part of the White Paper "In Place of Strife", which inspired the establishment of the C.I.R. and which inspired a large and forward-looking part of "Programme for Action". We need all that. We also need rules, be they Government legislation or T.U.C. rules, in the short term that men unconstitutionally on strike go back to work so that unions and management can negotiate, whatever the grievance may be about.

Mr. Heath: Is the Prime Minister aware that the so-called turning down of the Royal Commission was in answer to a Motion on the Order Paper signed by only two hon. Members, and that it was turned down because at that time we were discussing with the trade union movement and its responsible leaders putting their own house in order, which at that time was a sound policy? Is he also aware that we shall really believe that the Government are in earnest when we see a Bill produced before this House which is an effective measure for the reform of industrial relations?

The Prime Minister: What the right hon. Gentleman regards as a test of earnestness is not relevant after his record in this matter. The date to which he refers was after about 8½ years in office, and nothing had been done. After the date to which he refers, which I believe was early in 1960, if we can believe the report in The Times on this occasion—[Interruption.] If that report of what he then said is correct, the Conservatives went for another 4½ years after that and did precisely nothing.

Mr. Heath: Is the Prime Minister aware that when the proposal was put forward by my right hon. Friend the Member for Grantham (Mr. Godber) as Minister of Labour, the most fervent opponent was the Prime Minister himself, leading hon. Members on the benches opposite? In the interests of industrial relations, would it not be better for him to agree that the whole House over the last 15 years has learned the need for a fundamental review of industrial relations legislation?

The Prime Minister: If the right hon. Gentleman is telling me that the then Government proposed a Royal Commission and we opposed it, I should like him to produce evidence of that. We said that


we would introduce legislation on one outstanding case, Rookes v. Barnard, and we did so. We were right to do so. Had we not done so, the atmosphere in industry would have been a great deal worse. We also said that we would set up an inquiry, and we set up a Royal Commission in 1965. If he says that he has now learned after 15 years and everybody else has learned, I do not know why he did not learn anything—[Interruption.] It seems to me that the right hon. Gentleman only learned when he no longer had the responsibility of office.

Several Hon. Members: rose—

Mr. Speaker: Order. We are past half-past three. Mr. Peart. Business Statement.

BUSINESS OF THE HOUSE

The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): With permission, Mr. Speaker, I should like to make a short business statement.
On Thursday, 19th June, the 22nd Allotted Supply Day, the subject for debate will be on the Implementation of the Recommendations of the Parliamentary Boundary Commissions, and not on the Dainton Committee's Report, as previously announced.

PROTECTION OF ANIMALS

3.32 p.m.

Mr. Ben Whitaker: I beg to move,
That leave be given to bring in a Bill to amend the law regarding the protection of animals.
This might be called a Five-Minute Rule Bill, because I will venture to detain the House for only a short time, partly because I recognise that there are other and wider issues before the House—and I personally have always felt that the protection of children from cruelty is a matter which should have far higher priority than the welfare of animals—but partly, also, because my Bill is very simple in its scope.
The Protection of Animals Act, 1911, already prohibits cruelty or unnecessary suffering being caused to domestic animals. Basically, my Bill seeks merely to add the words "and wild" after the word "domestic" to give wild animals the same degree of protection. This was, in fact, recommended by a joint Committee of the Home Office and the Scottish Home Department—as it was then called as long ago as 1951 in its Report (Command 8266), so I do not think that it can be argued that any undue impatience is displayed in asking for legislation now.
At present, the Protection of Animals Acts do not apply to wild animals, unless they are in captivity. It is, therefore, possible at present to cause suffering to a wild animal without sanction or restraint, and that is equally true about anything done in the course of an organised alleged "sport" as well as the acts of private individuals.
I find it difficult to credit how it can be argued seriously that what is cruelty in the case of one animal is not cruelty in the case of another, or that human behaviour which Parliament has thought right to restrain and control in the case of—for example—badgers, hares, seals, or foxes in captivity can be thought substantially different when those animals are living wild.
We all realise that many other more important issues compete for the time of Parliament. During the past few years, a number of hon. Members have sought to legislate, so far without success, in the case of, for example, hare-coursing, stag-hunting and otter-hunting. Those


measures have been obstructed by what my right hon. Friend the Prime Minister would describe as "tightly-knit motivated minorities". It is more satisfactory as well as saving of the time of the House if we deal with the whole issue comprehensively, as I seek to do in my Bill, by giving general protection and then afford those who wish to write in exceptions to the protection the opportunity and the onus of justifying doing so.
During the Committee stage of my Bill, if is gets a Second Reading, the Committee will be glad to listen carefully, for example, to those who seek to persuade the Committee that foxes enjoy being hunted. I am sure that such views will be evaluated and treated with the attention they deserve. Equally, I will be glad to bring in under the scope of the Bill the implementation of the recommendation outstanding from the Little-wood and Brambell Reports, if the Government would like to take this opportunity to do so. The time of Parliament will, therefore, be saved once and for all.
I believe that recent surveys, as well as the correspondence of hon. Members, have shown that Parliament is now somewhat behind public opinion by its failure to move on these issues. I would submit that legislation in this field has a value by contributing a little light on the standard of our civilisation. I think, also, that it has its part to play not only in the effects that it has on animals, but also in its effects regarding human beings.
I hope that leave will be given to introduce the Bill and that, even if there is insufficient time remaining in this Session for it to complete all its stages, a similar Measure will not be delayed from becoming law before very much longer.

Question put and agreed to.

Bill ordered to be brought in by Mr. Whitaker, Mr. William Hamilton, Mr. Heffer, Mr. Hamling, Mr. Lubbock, Mr. Lipton, Dr. Summerskill, Mr. Gwynfor Evans, Mr. E. Rowlands, Mr. William Price, Mr. Peter M. Jackson, and Mr. Frank Hooley.

PROTECTION OF ANIMALS

Bill to amend the law regarding the protection of animals, presented accordingly, and read the First time; to be read a Second time upon Friday next and to be printed. [Bill 176.]

LIBYA (ARMS SUPPLIES)

Mr. Speaker: Before I call on the hon. and learned Member for Northampton (Mr. Paget), I would point out to the House that many hon. Members wish to speak today. If we are to have a fair representation of the widely differing views in the House, it is important that those hon. Members whom I call speak briefly.

3.40 p.m.

Mr. R. T. Paget: I bed to move, That this House do now adjourn.
I should like to express my gratitude to you, Mr. Speaker, for having given me the opportunity, I hope briefly, to raise this grave question. I do so with a sense of profound inadequacy, for I stand here to raise my voice in this great cause where Winston Churchill and Sydney Silverman were wont to stand before me.
The facts are these. We have, since the creation of the State of Israel, been the principle supplier of her armour. We supplied a great part of the arms which won the Six Days' War and, about two and a half years ago, we approached her to buy the Chieftain tank which we were developing. We sent her two tanks to evaluate, which took a considerable time. Many modifications had to be put into them. The Chieftain is a heavy "antitank" tank, not very manœuvrable, not so much an attacking tank as a defending tank, and Israel wanted it to meet the T.55s, the new Russian tanks which have been supplied to Egypt in great numbers since the Six Days' War. It is a tank which outclasses any other at present in the area.
Of course, a human factor is involved. It may be that, sometimes, a bicycle can beat a tank if there is an Israeli on the bicycle, but that is not the way in which chiefs of staff can evaluate a situation. They had to decide what was needed for their defence. They picked this tank, the contract was ready, it was to extend into 1972, and then, in May, without advance warning, it was stopped by the Foreign Office.
The Foreign Office then decided to supply this tank instead to Libya. Libya is a member of the Arab League, and is at war with Israel, and has not even got


a cease-fire. That tank was supplied unconditionally, that is to say, it can be passed on to Egypt, but, perhaps more important still, it may be taken over by Egypt—

Mr. Christopher Mayhew: rose—

Mr. Paget: No, I am sorry, we have been asked to make short speeches.
While all of us wish King Idris well, we must recognise that his sort of régime is an uninsurable risk in the Middle East today. Its duration is doubtful and the point at which these tanks are immediately Egyptian is doubtful—

Mr. Mayhew: On a point of information, would my hon. and learned Friend give way?

Mr. Paget: No.

Mr. Mayhew: I am putting a simple point. What evidence has my hon. and learned Friend for saying that the contract is unconditional? It would be most unusual for a contract like this not to be conditional on the arms being used for the national purposes of Libya.

Mr. Paget: This will be exceedingly interesting. We shall find out, perhaps. We might have the answer later—

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Michael Stewart): I want to reserve what I have to say until later, when I have heard more of what hon. Members wish, but I would like to help the House by clearing up this point at once. It is part of our general practice in the sale of arms that they should be used solely for the defence of the country to which they are sold. This is our general practice and it was explicitly provided for in this contract, as in others.

Mr. Paget: I am grateful to my right hon. Friend—

Hon. Members: Withdraw.

Mr. Paget: Of course I will withdraw.
This point was raised on Thursday last by the right hon. Member for Stafford and Stone (Mr. Hugh Fraser). My right hon. Friend the Secretary of State was then asked to come to the House and make a statement. It is a pity that he did not do so.
None the less, whether this restraint exists or does not, in these kinds of circumstances it makes very little difference. The tenure of these tanks in Libya is much too doubtful. It is the sort of régime of which King Idris is the last instance in this part of the world. Why have we suddenly taken sides—or, indeed, changed sides? To stop these negotiations with Israel and to say suddenly that she is not to have the tanks, and, at the same time, that a country with whom she is at war shall have the tanks, is to change sides. It is this changing of sides which seems to be the most important matter.
Is it a case of morality? Of course, the Arab case against Israel is that Israel exists. That is a case which it is difficult for us to accept, because we created Israel. Two years ago, Israel was the intended victim of a war of plain aggression. Egyptian troops were massed on the Sinai frontier. We have no less an authority than Napoleon for describing that as an inevitable act of war. But, of course, this applies to Israel far more than anywhere else. Israel has a waist 10 miles long, she has not a single city out of artillery range of her enemies' guns, she has not the room to manoeuvre.

Mr. Donald Anderson: rose—

Mr. Paget: No.
Israel had no alternative, when threatened in that way, but to defend herself and view this as a deliberate act of provocation—

Mr. Anderson: rose—

Mr. Paget: I have said, "No".
The Gulf of Akaba was closed. Above all, what kind of war was threatened? A war of naked genocide, a war in which it was publicly proclaimed that the Jews were to be utterly destroyed, massacred, driven into the sea—and these are a people with experience of genocide. No one—or practically no one—here had any doubts as to where the rights and wrongs lay, until Israel committed the offence of winning.
It was only at that point that new thoughts began to come. Why? Israel stopped on the strategic lines, she returned the prisoners which she had taken


—thousands of them—unconditionally, she did not use them to bargain with, she agreed to negotiations immediately—open negotiations in which everything save Jerusalem was negotiable and at any table to which the other belligerents chose to come. Even on Jerusalem, the holy places could go, she said, to Jordan. But the Arabs have refused peace. They refused even to consider it. The only Arabs who have even consented to a cease-fire are those who are within range of Israeli guns.
The proposition that a belligerent Power should surrender positions to an enemy who refuses peace is so preposterous that it could only be advanced in a United Nations world which condemns Britain for refusing to cede Gibraltar to a Fascist State without regard to the opinion of the Gibraltarians. It is a grotesque proposition.
If morality is not in it, why have we changed sides? Is it because we want to try to win the Arab favour? Here again, my right hon. Friend lacks the cynicism to compete successfully with the Russians in rewarding the iniquitous and exploiting the vanities of Arab Governments. These are Governments living in a dream world in which they are obsessed with an Israel who, they say, does not exist and indifferent to the welfare of their own people. In old times, the incompetence and tyranny of Governments was limited by the necessity to hold their frontiers. Governments which began to be intolerable could not exist because of outside pressures, but in this world we have provided a means by which interested outside nations, and perhaps the United Nations, can preserve this kind of Government from the nemesis which should overtake them. They are Governments which are living in a state of artificially protected schizophrenia, and we shall not have a happy or viable Middle East while this state of affairs continues.
Are we selling these tanks simply because we need the money? I will not go into the question whether Israeli money is not as good, but I came into this party when idealism counted. In those days, we minded about the merchants of death, the sale of arms for profit and exploitation, and the efforts of men like Sir Basil Zaharoff, who went to one country to build up fears of a neighbour so

that he might supply the arms to meet that threat he had invented, and then went to the neighbour for the same purpose.
This was a process which we knew and denounced, and what we denounced most about it was the evil of the secrecy of this armaments trade and the building up of armaments. This is why I felt a nostalgic shock when my right hon. Friend yesterday sent to the House a message to the effect that he was not making a statement because armaments deals were traditionally not disclosed. It is so totally contrary to everything that we have ever stood for that the excuse seemed to me to be worse than the offence.

Mr. John Biggs-Davison: rose—

Mr. Paget: No, I am sorry, I am not giving way; so many hon. Members wish to speak.
We have now found an even worse system than the old system of private and competitive armament industries. At least in those days armaments were limited by the capacity to pay for them, but that limitation has now gone. Armaments in enormous quantities are supplied without any need to pay for them. They are not being supplied for money; they are being supplied for mischief. Arms for mischief have been poured into the Middle East.
No one seriously imagines that any Middle Eastern country is being threatened by Israel or by anybody else. The supply of armaments is a method of building up vanities. There is internal corruption. A military type régime is flattered and built by the continual flow of arms which nobody proposes that it should pay for but which are yet seen as competitive bids for favour. So armaments go to the Middle East and to Biafra not for money, but for mischief.
The contract has been made with Libya and, doubtless, we have to perform it, but what is the situation of Israel? Do we imagine that by threatening to cut off her armaments we will persuade Israel to put her head on the block and surrender defensive frontiers to people who will not make peace with her? Of course we do not. All we are doing is encouraging the total intransigence of the Arabs by persuading them that


Israel's friends are turning on them. Yet it is on the strength of Israel that peace depends. Does anyone in the House seriously doubt that any Arab neighbour of Israel would not attack Israel but for the reason that to do so would mean defeat?
The one factor which restrains war on Israel is the knowledge that Israel can defend herself. By stopping that knowledge we build for war in this area. I beg my right hon. and hon. Friends to allow Israel to maintain that strength, that protection and that deterrent which secure Middle Eastern peace, albeit precariously. Without that deterrent and without the power known to be held by Israel, she would be attacked and set upon.
We all know that. Why, then, do we, her traditional friend, seek to deny her the means of defence by this anti-tank weapon and to raise the Arabs' hope that they can solve their problems by a renewal of war?

4.55 p.m.

Sir Alec Douglas-Home: I rise to make a short intervention following the serious speech of the hon. and learned Member for Northampton (Mr. Paget). Yesterday, Questions were early on the Order Paper and the House was anticipating that the Foreign Secretary might make a statement on the supply of tanks to Libya. Had the right hon. Gentleman been in his place yesterday, this emergency and somewhat ragged debate could have been held in better circumstances. We could, for example, have discussed the Government's policy on the export of arms and might perhaps have heard from the Foreign Secretary a wide survey of his policy.
The Foreign Secretary was gallantly defended yesterday by the right hon. Gentleman the Minister of State for his decision not to come to the House. He perhaps made a slip of the tongue when he said that it was the Foreign Secretary's intention not to come to the House and be there for Questions and to make a statement.

The Minister of State, Foreign and Commonwealth Office (Mr. Goronwy Roberts): I assure the right hon. Gentle- 
man that if he consults HANSARD he will find that is not the phrase which I used.

Sir Alec Douglas-Home: If the right hon. Gentleman consults HANSARD he will find that he is mistaken in what he said. I do not want to pursue this matter; I have no doubt that the right hon. Gentleman will put this right.
If the decision to sell tanks to Libya is judged in isolation, this is not a matter with which one can quarrel. The hon. and learned Gentleman will understand that there is a treaty of alliance with Libya, the wording of which is that the British Government will use her good offices to facilitate the supply of arms to the Libyan forces. This is, therefore, a perfectly normal transaction between the British Government and an ally with whom they have a treaty.
Libya is not a country which one normally includes in the context of Middle East confrontation. If Libya has been in danger, let us say, it has been in danger from the direction of Egypt and because of Egypt's expansionist ambitions. Libya, therefore, can surely not be blamed for trying to buy, as the hon. and learned Gentleman said, a tank with a slow mobility but with a very effective fire power against other tanks to improve her own security. If Libya acquires these tanks, the security which she will acquire will be better than it was before.
I suppose that there is a conceivable case that Egypt might take over Libya, but this would be very much less likely if Libya acquires the tanks which she has ordered. But this deal, as the hon. and learned Gentleman has said, raises the question of others that may be pending with Arab countries or with Israel—countries which are in a permanent state of hostility and have lately been at war.
The policy—and this is a much more sensitive and difficult matter—previously followed by successive Governments in this country has been to sell to both Arabs and Jews, seeking to maintain a quantity and quality of weapons at reasonable levels and, overall, to achieve a rough balance, so that no country in that area would be at a disadvantage against another in its ability to defend itself. It was a rough and ready policy and not very satisfactory, but, nevertheless, an uneasy peace was held.
For example, in the past we have supplied arms to Jordan and fighter aircraft to Saudi Arabia. We had a defence agreement with Kuwait, and we actually came to her aid. We have also sold Centurion tanks to Israel.

Mr. Frank Allaun: Does not the right hon. Gentleman think that it would have been far better for the peace of the Middle East and of the whole world if we had not supplied arms to either side?

Sir Alec Douglas-Home: The hon. Gentleman is anticipating a point to which I shall probably be coming in a minute or two. In fact, I will come to it now.
We have always been anxious for an international agreement to limit the importation of arms into the Middle East; but this must include the United States and the Soviet Union—and the Soviet Union has not so far agreed. In the absence of such collective self-denial, I see little alternative to pursuing the old policies.
For example, it would be legitimate to sell arms to the new Federation that is being built in the area of the Gulf or to Saudi Arabia or to Jordan or, indeed, to Israel, provided that the Government always take the responsible position that the quality of the weapons sold is defensive in character and that no country in this area is given an excessive quantity of arms.
It is impossible for an Opposition to express an opinion on timing. We have no idea what may be in the Government's mind about deals with different countries in this area, and we are not in a position to know the possibilities. But there is one aspect of the matter of which the Foreign Secretary will be well aware and which the hon. and learned Member for Northampton mentioned. Egypt and Syria, for example, are being rearmed by the Soviet Union. They boast of the quantity and quality of the equipment which they get from the Soviet Union, and continually say that they can acquire more at need.
In certain circumstances, I think that the House would be bound to feel, therefore, that to deny Israel the ability to buy could amount to discrimination against her. I hope that the Foreign Secretary will be able to enlighten us a

little about the deal that was proposed with Israel. For example, is it true that the Israeli Government was given the go-ahead for the buildings and preparations necessary to service the tanks which it had reason to anticipate would fairly shortly be delivered?
I think, too, that the Foreign Secretary ought to be cautious in pleading in aid the four-Power talks in Washington. The Russians have only to stall those talks and to play them long to serve their own clients in this area and again to put Israel at a disadvantage.
In response to the hon. and learned Gentleman, there is no satisfactory solution, except international control of the armaments going into this area. But we are not there yet. Until we are there—and this point ran through the hon. and learned Gentleman's speech—surely every country in this area has the right of self-defence and, therefore, the right, if they wish, to order the arms.
The Government in this country and the Governments in other countries which supply arms have to decide the quantity and quality of arms. On the whole, I think that successive British Governments have limited the quantities of arms and tried to make certain that they are defensive in character.

Mr. John Lee: Does not the right hon. Gentleman think that one other relevant factor in the export market is the character of the Government or the régime of the country to which the arms are being sent?

Sir Alec Douglas-Home: I never liked dealing with the character of Governments. It is much safer to plan foreign policy and armaments policy in the longer term, looking at the historic position of the countries concerned and the prospect of how they may act in their national interests under any Government.
The House should be grateful to the hon. and learned Member for Northampton for raising this matter, because it gives the Foreign Secretary the opportunity to explain more of the Government's arms policy. In particular, will he say, concerning this area, that until there is international agreement every country has the right of self-defence and that the Government will try their best to limit the quantity and quality of arms


so that self-defence is served and aggression is in no circumstances promoted?

4.8 p.m.

Mr. E. Shinwell: In his opening remarks the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas Home) expressed what I believe is the general opinion of all right hon. and hon. Members in this House, namely, that if the Foreign Secretary had come to the House yesterday and occupied his usual seat on the Government Front Bench and made a statement—a statement which might have been unsatisfactory to many right hon. and hon. Members, but, nevertheless, a statement justifying his existence, if I may put it that way—it would have avoided an emergency debate. Indeed, as the right hon. Gentleman has just said, it might have provided us with another opportunity for a full-scale debate on the Middle East situation.
This is obviously not the occasion for such a debate. Although references have been made by my hon. and learned Friend the Member for Northampton (Mr. Paget) and, indeed, by the right hon. Member for Kinross and West Perthshire, about the general situation, however tempting, I propose not to allow myself to be assailed by such a temptation but deal in a pragmatic way with what I regard as the main issue, which is the cause of this emergency debate.
It is remarkable—and I hope that right hon. and hon. Members notice it—that when my hon. and learned Friend was speaking about the provision of the Chieftain tanks to Libya, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs, who, apparently, was so reluctant to come to the House yesterday to speak on this matter and who, according to all the information in our possession, is always reticent about any statement relating to the provision of arms, immediately interrupted my hon. and learned Friend to inform the House about a point which hitherto was unknown to us—certainly it was unknown to me—namely, that the tanks provided for Libya were conditional.
That was opening the debate a little wider. I was not expecting that at the outset. But it indicates that when it comes to the crunch, under the pressure

of back bench opinion and with the consent of Mr. Speaker, the Foreign Secretary is forced to come to the House; and this, if I may say so, is not a bull point for the Government in the present situation—and that is putting it very mildly.
My hon. and learned Friend dealt with part of the background. He omitted one or two points. According to my information, in 1966 the Israeli Government, or at least the Ministry of Defence in Israel, conceived the notion that this Chieftain tank was the kind of weapon which it would like to examine. Arrangements were, therefore, made to despatch two Chieftain tanks to Israel on trial. The defence technicians in Israel, who undertook a very close examination of the tanks and discovered certain defects from their point of view, and, therefore, suggested modifications.
The tanks were returned to this country. That was a very generous action on the part of the Israelis. In view of all the criticism with which they are assailed, I should have thought that when they got the tanks they would have kept them. But they returned them, and entered into a period of protracted technical discussions with the Ministry of Defence in this country.
I say here almost in parenthesis—the Secretary of State for Defence is not present; he is on a tour of Australia, New Zealand, and the Far East, and I wish him well—that I should have liked to have seen him sitting beside my right hon. Friend the Foreign Secretary, because it is my understanding that the Secretary of State for Defence, who knows all about the technical discussions, was very anxious that Israel should obtain a large number of these tanks. That was the assumption underlying the protracted technical discussions.
I offer my right hon. Friend the Foreign Secretary the opportunity of saying that there is no division in the Cabinet about this. My right hon. Friend always speaks the truth. At one time he was my Under-Secretary of State at the War Office, and I know him to be a man of integrity. I am sure that he will tell us the truth. If there is no division in the Cabinet, tell us so. We would like to know occasionally that there is no division in the Cabinet.
Let me present in simple form the issue before us. The issue is not the general


position in the Middle East, but why the Government of Libya, who are in a state of having declared war against Israel, should be furnished with tanks by an agreement between the Libyan Government and the United Kingdom Government, while, at the same time, the Israeli Government, who, in view of the technical discussions which lasted for two and a half years were labouring under the assumption that they were to be provided with tanks, have been discriminated against. Why is Israel denied the tanks which she expected to receive? In May of this year, when the Israeli Government expected to sign an agreement providing for the supply of a large number of Chieftain tanks, they were informed by the Foreign Office—my right hon. Friend can deny this if he cares to do so—that it was undesirable to give that firm undertaking because of a very delicate situation.
What was meant by a delicate situation? The answer was that the four-Power talks are in operation. One of my hon. Friends says "Very important", but let it be noted that the Soviet Union, although a member of the four-Power talks, is engaged all the while in providing an abundance of arms to the Arab States.

Mr. Frank Hooley: Will my right hon. Friend allow me to intervene?

Mr. Shinwell: No, I shall not allow my hon. Friend at all.

Hon. Members: Why not?

Mr. Shinwell: Hon. Members can shout their heads off and ask, "Why not?". The answer is that I shall proceed with my speech.

Mr. Andrew Faulds: And not have regard to the normal courtesies of the House.

Mr. Shinwell: I beg hon. Members not to provoke me. They know that I am a person of uncertain temper, but at any rate I have some experience of this House, which is more than applies to some hon. Members.

Mr. Hooley: On a point of order. Mr. Speaker. Is it the custom of the House to regard a normal request to intervene in another Member's speech as a provocation?

Mr. Speaker: I think that any hon. Member can regard any other hon. Member's intervention in the way that he chooses. It is for the right hon. or hon. Member to decide whether to give way. I should point out to the House that interventions and noise prolong speeches. I have appealed for brief speeches. If we are to have a fair debate, the debate must include every shade of opinion.

Mr. Shinwell: I am grateful to you, Mr. Speaker. We were asked to make short speeches, and I am endeavouring to condense my remarks into the smallest possible compass. Moreover, I am anxious to avoid a full-scale debate on the Middle East situation. I want to keep to the matter at issue.
I repeat what I ventured to say before, that while the four-Power talks are proceeding our Government use them as an alibi for not providing Israel with the tanks she expected to receive, whereas, at the same time, the Soviet Union, also a member of the four-Power talks, is providing the declared enemies of Israel—nobody can deny that—with all the weapons they want, including some special kind of weapons. I would rather not mention the weapons by name, but no doubt my right hon. Friend the Secretary of State for Foreign Affairs knows something about the arms being provided to the Arab States.
Let me put my case as simply and as clearly as possible. I have no objection to Libya's receiving Chieftain tanks. Why should I? If we were discussing not providing arms to anybody, it would be a different matter. I subscribe to the genuine conviction of my hon. Friend the Member for Salford, East (Mr. Frank Allaun). If we could work along the lines suggested many years ago by my right hon. Friend the Member for Derby, South (Mr. Philip Noel-Baker)—and it is still his opinion—who has been insistent about preventing arms being provided for other countries, I should accept that. It is a fine principle. It is a sacred principle, and I accept it wholeheartedly, but we are not living in a dream world. We have to be realistic.
Israel is faced with enemies. Never mind about the pros and cons, the refugee question, and so on. There are two sides to this issue, and I understand


them thoroughly. I do not object to Libya's receiving tanks. All I ask is that if she is to receive them, why should Israel be prevented from receiving tanks? That is a very simple question. We are told that it is because of the four-Power talks, but there may be another reason. Perhaps I know what I am talking about. When I ask whether there is a division in the Cabinet, it may be that some fear an Arab trade boycott, which would be very undesirable in the present economic situation.
I fully appreciate and understand the tradition governing these matters. I have used it myself as Minister of Defence and Secretary of State for War, when I have been asked similar questions. I understand the tradition about not furnishing details regarding arms supplied—how many tanks, guns, aircraft, and so on—but the Foreign Secretary cannot say, as his junior Minister said yesterday, that he cannot provide any information about the provision of arms.
What about our relations with South Africa? We refused to provide her with arms, because, it was said, they might be used against the natives. We gave a reason for our action or inaction. That is all I ask the Foreign Secretary to do, to give us a reason why Israel is being prevented from receiving privileges which are being conferred on Libya.
It is a simple point and I expect an answer. Of course, it may be an unsatisfactory answer. I hope not; but I make no bones about this. Anxious as I am to see the Government succeed—and perhaps I have helped as much as anybody, behind the scenes and in public—if it came to a vote tonight after an unsatisfactory answer or an answer which is uncertain and leaves the whole subject in the air, I would have no hesitation in voting against the Government—none whatever, whatever the consequences.
The consequences—I mean the personal consequences—no longer matter to me. Nevertheless, I would act with conviction, not that I subscribe to everything the Government of Israel does except that they do want peace. They must have peace.
As Mrs. Golda Meir said yesterday at the International Socialist Conference at Eastbourne—and how right she was!—

if there is another war in which Israel is involved against the might of the Arab States and the Soviet Union it may be the end of Israel, the last chapter. I do not want to see that happen. Whatever may be the criticisms hurled against Israel, here is a democratic State that can promote development in the Middle East as well as for itself. Israel is a friend of this country and right hon. Gentlemen on the Front Bench who I see before me have declared their friendship for Israel. Let them prove it here and now.

4.23 p.m.

Mr. Hugh Fraser: I am sure that the whole House, and, I imagine, now the Government Front Bench, will agree that it would have been far wiser had the Foreign Secretary made a statement to the House on this matter earlier. I am also sure that we are very grateful to the hon. Member for Woolwich, East (Mr. Mayhew), who seems to have been acting as a Government spokesman on T.V. on the question of the strings being attached to this agreement. For this information, the whole House and the whole country will be grateful.
No two men have adopted a more holier-than-thou attitude to arms deals than the right hon. Gentlemen the Prime Minister and the Foreign Secretary in relation to arms for Spain, South Africa, or Portugal. Now they seem amazed that anyone should dare to question the probity or wisdom of their action in pouring arms unilaterally into a known belligerent Power in the powder keg in the Middle East, or into Nigeria for the massacre of Africans by Africans. They are horrified and say how unpatriotic people are to question that. Nigeria is a subject of bloody failure of policy which I will raise again in the House.
I want to turn now to what has been done in this deal. Everyone in the House believes that normally it is perfectly proper to carry out an alliance especially with an oil-rich State and especially with a State which is friendly to ourselves, like the State of Libya. But my first criticism of this deal is against the world background. With the situation in the Middle East as we know it, it seems very peculiar. Is there not another way or have not other ways been considered, of supporting King Idris against his possible overthrow by predatory powers?


It is no secret that when the last Conservative Government were in office we had an alliance with King Idris which this country still has; and it was thought more prudent to provide tanks, armoured cars, and so forth, which would be there available to be manned by expert technicians. Quite frankly, I believe that that would be the best way a defending King Idris and Libya against attack.
I believe that attention should be drawn to the White Paper, where it is stated that V-bombers are to be stationed in Cyprus. I would have thought that to send tanks to Libya at this stage unless we are able to redress the balance by equally transmitting tanks to Israel, is far from being prudent. This tank, which some hon. Gentlemen may have driven—I have—is one of the most complicated in the Western world. Incidentally, as the right hon. Gentleman the Member for Easington (Mr. Shinwell) may know, the two tanks which were loaned to the Israeli Government, as I am sure the Deputy Minister for Defence will know, had considerable troubles with their oil filters. This was put right by Israeli technicians. It was valuable work which I am sure will be rewarded in the deliberations when the Foreign Secretary comes to weigh up these matters.
But I would have thought it was strange that at this period, precisely when we are landing some of the most complicated weapons in the Western world into Libya, we are withdrawing from Libya the technical school for tank training which we established there several years ago. I am sure the right hon. Gentleman the Minister for Defence will agree with me on this matter. It seems a peculiar way of helping our friends.
On broader grounds, I believe that this is a bad way to maintain an alliance. Of course, we want to maintain the alliance with Libya, but what we seem to be substituting is a willingness to fight with an urge to make money in our arms emporium. I do not believe that that will impress anyone, least of all the Libyan Government, although it may succeed with the present Government there. We are replacing soldiers with salesmen and that does not always work. In the sum of things, Her Majesty's Government are making the balance of pay- 
ments more important than national policy and world peace. It is for that reason that I criticise what they have done.
The right hon. Gentleman the Member for Easington has raised other points. The main one was this blow to our friendship with Israel. The other point raised by the hon. and learned Gentleman the Member for Northampton was the question of the disposal of these arms elsewhere. Whatever the price, and the strings attached, we saw such strings attached to the American arms that were given to Jordan. They were not to cross west of the Jordan river. We saw what happened there. For a predatory Power, oil plus a very large number of vehicles which the inhabitants cannot drive, and which are of great military value, makes that a more attractive target than ever before.
There is another important point which must be answered by the Minister tonight. That is the question whether we are now in great danger of running down by sales the stocks of arms behind the British Army to a dangerous level. This needs to be looked at with the greatest circumspection by all concerned. Only one figure is published in the White Paper and this refers to purchases totalling about £26 million this year for the replenishment of stocks.
I am not sure what that figure means. It may mean everything, it may mean nothing. But we know the weight of ammunition which is being blown into the air by the Federal Government in Nigeria today. We know what is happening and what will happen when this deal goes through. Would the Minister give the levels? What are the stocks of armoured cars in this country for our reserve? How many Abbot self-propelled guns, 105 mm shells or 81 mm mortars are there?
The situation concerning the latest type of tank is even more extraordinary. Only a few months ago, as the Government well know, the production of this tank was held up because the Government's policy at that time was to make savings in defence. There was a hold-up in orders. Perhaps the Minister will tell us the supply of Chieftain tanks to the British Army of the Rhine. Perhaps he will say why there were no manœuvres with this new tank at brigade or divisional


level last year. What tanks are in reserve for our armoured divisions? These are important considerations.
The Government, not knowing what their left hand or right hand is doing, are taking risks not merely with our good name, but with our national security. In the Middle East and in Africa the angels of death are abroad. I cannot, like the great John Bright, hear the beating of British wings. That part of the deal is being done, as arms traders, by "our good friend" the Soviet Union. But, plucked and featherless as any moulting vultures, there are other angels of death abroad. There is one of them present—the most pharisaical Foreign Secretary in British history.

4.32 p.m.

Mr. Christopher Mayhew: The hon. and learned Member for Northampton (Mr. Paget) spoke with great conviction. But I think that he spoke with greater conviction when arguing that we should send tanks to Israel than when arguing that we should not send tanks to Libya.
The tenor of the debate suggests that there is no strong feeling in the House against the proposition that we should send tanks to Libya. A number of the reasons were given by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home). We are Libya's ally. Not only are we committed by our treaty of alliance to sending arms to her and helping her with her armaments, but she faces the prospect of the withdrawal of the American and British military presence in a few years' time. Therefore, we have a special obligation—and it is a routine procedure when we leave a country in these circumstances—to help her with her armaments. We are doing it for Singapore and Malaysia, and the Americans are doing it for South Vietnam.
Libya accepts the United Nations Security Council resolution. She is in favour of a peaceful settlement in the Middle East. She is a peace-loving country and a good customer. I see no reason why we should decline to go ahead with the supply of arms.

Sir Douglas Glover: On a point of order. Is it not a long-standing rule in the House that hon. Members are not allowed to read newspapers?

Mr. John Mendelson: Further to that point of order. Somebody has just handed me this newspaper. The headline is:
Total alert from Cairo to the Suez. Russian mission at Nassers Canal Zone H.Q.".
It is an established rule that anything which might be used later in the debate can be looked at.

Mr. Deputy Speaker (Mr. Harry Gourlay): The hon. Member for Penistone (Mr. Mendelson) is right. The reading of newspapers is deprecated other than in the circumstances mentioned.

Mr. Mayhew: The part of the notice on today's Order Paper, referring to the arms deal with Libya, is not widely supported in the debate. The hon. and learned Member for Northampton should not have referred to an unconditional arms deal without making inquiries. It is not for the Foreign Secretary to say that this arms deal is conditional. This is now a normal feature of arms deals. To be able to say that it is unconditional special knowledge is required. I am surprised that the hon. and learned Gentleman did not make inquiries before submitting his Motion.
The issue on which some of us are still divided is whether we should send these tanks to Israel. I should like to say a few words on that, beginning with a proposition which, I hope, will unite most people on both both sides of the argument. Israel is entitled to the fullest possible security on her frontiers. I hope that everyone agrees with that. It is embodied in the Security Council resolution. It will certainly form part of the proposals of the four Powers, whatever they may be. It is certainly agreed and conceded by the Arab States most closely concerned—Jordan, Egypt and Lebanon—that Israel is entitled to maximum security on her frontiers, The Arabs say that it is not necessary, but they do not object to it.
If Israel were prepared to accept them, new and formidable security measures could be generally agreed to protect her frontiers. They could include, for example, minor frontier rectifications for tactical reasons. They could include a demilitarised zone on both sides of the frontier to a depth of, say, 15 kilometres, which would cover the Golam Heights, and lead


to Syrian troops being banned from the Golam Heights, and within the demilitarised zone a uniquely powerful United Nations force which could, though it is not yet decided, include contingents from France and Britain.
All this is within the realm of practicability and it is available to Israel if she chooses to accept it. If it were done, who could then fairly object to sending arms to Israel? I do not think that even the Arabs would have any right to object if, in those circumstances, Britain sent tanks to Israel.
Therefore, the difference in this debate is not between those who are willing to send tanks to Israel and those who are not, but between those, among whom I include myself, who would be willing to sell arms to Israel to defend her frontiers in support of the United Nations, in support of a settlement, and those who would be willing to send arms to Israel in defence of her conquests, in defiance of the United Nations and of a settlement. That is the issue and that is the point on which the Government have taken a clear stand in principle—a stand which, in my view, is unshakable in moral or political terms.
Israel has made clear that she rejects in advance any proposals for a settlement put forward by the four Powers. We do not know what they are yet, they have not been decided, but Mrs. Golda Meir has made clear that she rejects them in advance. The Israelis also reject the Security Council resolution of 1967 proposed by the British Government and passed unanimously.

Sir Barnett Janner: Nonsense.

Mr. Mayhew: She certainly rejects it. What is more, she has made it clear that there can be no question of her going back to her frontiers and that the subject of her exclusive control of Jerusalem is not for negotiation. These are facts.
Surely it was, therefore, no surprise to anyone who follows these matters closely to read Mrs. Golda Meir's statement a few days ago that Israel finds herself at odds not only with her enemies, but with her friends. The diplomatic and moral isolation which she experiences is not just the result of her current attitude of defiance of world opinion and of the four Powers and of the Security Council.

It is also a culmination of a record of defiance of United Nations resolutions unexampled by any other member State of the United Nations.
Yet what more could the British Government do to strengthen Israel's attitudes on these points, to make her more intransigent, more inclined to oppose the British Government's own proposals for a settlement, than, unconditionally or conditionally, to sell her Chieftain tanks at this moment? To do this would not only be the stamp of moral approval of Israel's defiance of the United Nations, but would give her the physical means to carry out that defiance by refusing to accept the Security Council's proposals.
On every count, therefore, this shows that the Government's attitude is right. But that is only one reason. There are others which are almost equally weighty to support the Government's line. For example, there are special problems of arms deals where the country concerned can use the arms not for self defence but for internal repression. This distinction has already been recognised and acted upon by the Government. In relation to arms suppiles for Portugal, for example, the distinction is clearly made.
Israel's refusal to withdraw from the conquered territories is facing her with a problem familiar to all countries which have had to rule over conquered or colonial peoples—that vicious circle by which resistance breeds repression, repression breeds tougher resistance and tougher resistance breeds more brutal repression. The hard fact is that the Israelis are having to rule more than 1 million Arab subiects in the occupied territories with an increasingly heavy hand. It must be something of a record in the history of police repression that a demonstration of school girls in Gaza, broken up by the police, should result in 40 school girls being detained in hospital.
This gives a special dimension to the problem of selling arms to a foreign country. The House remembers well the photographs of British arms being used at Sharpeville. None of us wishes to risk seeing photographs in our newspapers of similar use of British arms in Gaza or the West Bank or Jerusalem—

Mr. Edward Lyons: What about Nigeria?

Mr. Mayhew: I do not want to get on to Nigeria at the moment.
That is the second major reason, which seems to me a reason of political principle, why we cannot sell arms to Israel at the moment. There are one or two more mundane reasons which are still important. There is the question mentioned by the right hon. Member for Easington (Mr. Shinwell), of the economic balance sheet of sending these arms. Israel is a good customer for us and our exports. We exported £86 million last year, although that figure comprised £47 million of British exports plus £39 million of industrial diamonds from South Africa. But it is a good customer and this arms deal, which was discussed by the Cabinet and rightly rejected -by them, would have involved £60 million.
But if one is considering this from a sordid and mundane point of view, then the amount of trade which we put at risk, the amount of our investments, the sterling holdings of the Arab countries, make it, as an economic proposition, wholly counter productive. This is a lesser but still important reason for supporting the Government's point of view.
I would ask my hon. Friends to support the Government on this issue. I have not always asked them to do so on other issues, but we do not want a Labour Government to sell arms to a country which is in breach of the United Nations resolutions, which is occupying tens of thousands of square miles of the territories of its neighbours, and ruling over 1 million subject foreigners with an increasingly heavy hand.
This seems to be an open-and-shut case. While Israel continues to defy the United Nations, and to reject in advance the four-Power settlement, while she is permitted to perpetuate, and is perpetuating, a monstrous injustice against the Palestinian Arabs, the arms deal with Israel would not help towards peace and would damage Britain's interest and reputation in the world.

4.45 p.m.

Sir Arthur Vere Harvey: I am not impressed by the speeches of the hon. Member for Woolwich, East (Mr. Mayhew). We have heard his pro-Arab views over so many years. He referred to the forty school girls who had to be

taken to hospital after a demonstration, but he has not referred to numerous cases on the other side of supermarkets being bombed and women and children killed. We always get one point of view from the hon. Member and that is why I discount it.
The hon. Member referred to the Israeli refusal to go back to their frontiers. How right they are. There would be little hope for them if they did. I am impressed with what the Prime Minister of Israel said, that she is prepared to go at one hour's notice to Cairo for peace negotiations. Surely that is the right thing to do.
This Government frequently hide under the cloak of the United Nations. I am not impressed with what is going on in the four-Power conference among Britain, France, the United States and Russia. In the United States, they have reversed the decision of President Johnson and will supply Phantom aircraft to Israel. I think that they recognise that there was a contract and that they will now supply them. In France, General de Gaulle refused to honour a contract although he had received money to supply aircraft. I learned from Paris a few days ago that Mirage spares are now reaching Israel; so perhaps there is a reversal there, and the new Government will honour that contract. As for the Rusians, they are supplying an abundance of equipment to the Arab States. How many technicians there are advising and helping them—

Mr. Stanley Orme: The catalogue which the hon. Member has given of arms being supplied to the Arab States and Israel raises the question whether it is not time for a moratorium on arms in the Middle East so that the four-Power talks can succeed. Is that not the answer?

Sir A. V. Harvey: Of course, that would be an ideal situation, as I am sure the British Government would agree. We have the same situation in Nigeria: if other countries would cease sending arms, I am sure that this Government would do the same. I do not necessarily agree that the way that they are doing it is right, but it is no good Britain opting out and leaving the rest of the world to create trouble.
Unless this matter in Israel is dealt with tactfully and properly, and if the Arab States win the next war against Israel, the whole nation—President Nasser has said this—will be pushed into the sea and annihilated. Let us make no mistake about what faces this country, which brought Israel into being, if we neglect to supply them.
I am not averse to supplying these tanks to Libya, which is a friendly nation. We have an agreement with it, although that has been weakened by the British withdrawal from Malta. But the Government must come clean. Had the Foreign Secretary, or a senior Minister in his absence, yesterday given a prepared statement to the House on this situation, we should not have had this debate. That would probably have been a good thing. The Leader of the House led us to believe last Thursday that he would see the Foreign Secretary and that he was hopeful of the outcome. It was not good enough.
Since the words have been disputed, this is what the Under-Secretary of State said:
—and it is not his intention to come down to the House this afternoon to make it. It is his considered judgment that he cannot make a statement on this matter, at least at this juncture."—[OFFICIAL REPORT, 16th June, 1969; Vol. 785, c. 30.]
As we have been told, he interrupted the hon. and learned Member for Northampton (Mr. Paget), and, of course, the House must be informed. The Government should not ride roughshod over private Members but should eat a bit of humble pie. It would have been good for them. Public opinion was too strong, and when back-benchers think that right must be done, the Government should act. I hope that the right hon. Gentleman will give us a frank statement today.
We have a grave responsibility today. We are not a great Power in the number of arms which we possess, but we still have considerable influence. I fail to understand this Government's attitude towards the supply of arms. We have heard all the reasons why arms are not supplied to South Africa, but we are a signatory of the Simonstown Agreement, and we do not give them the equipment to carry out that agreement. So often, the Government seem prepared to honour an agreement where trade is involved, but, if

trade is going to hurt Britain, they take the other view.

Mr. John Ellis: But has not this always been, historically, the main consideration of any Government where trade was involved and, therefore, the nation's well-being? Is it not a fair argument?

Sir A. V. Harvey: Then we should be supplying arms to South Africa, with which we have a favourable balance of £80 million a year. We had a great problem with Spain. The Prime Minister irritated General Franco before he came to power by saying that he should not take part in major exercises. If the Government had played their cards better with Spain, we might not be in this position now over Gibraltar. But the Government are very glad, over Gibraltar, to take no notice of the United Nations, and I take the same view in this problem.
We have supplied arms to Jordan since the 1967 war, and that is right. If Press reports are to be believed, we are supplying not only tanks to Libya but anti-aircraft artillery, half-track vehicles and automatic field artillery. I agree with that; but the Government must give Israel an equal break. I ask the Foreign Secretary to be absolutely honest about where Britain stands. We cannot opt out of this. The Government have led the Israelis to believe that a contract could be signed—otherwise they would not have sent demonstration models to Israel. I ask them to look at the matter carefully and see that Israel gets fair treatment.

4.53 p.m.

Mr. Philip Noel-Baker: I hope that the debate will have two results—that it will induce the Government to cancel their proposed sale of Chieftain tanks to Libya and that they will tell us why they thought it right to sell to Libya while repudiating an agreement which they had made, in effect, with Israel.
The Chieftain tank is the most modern and perhaps the most powerful offensive weapon of land warfare in the world. It is a sophisticated instrument for military attack. The Government's attitude, as I understand their statements, is that it is desirable that the sale to Libya should take place; that the Government have examined the matter with great care and are satisfied that the sale will not


upset the strategic balance in the Middle East; but that the judgment on that point should be left to them; that it is not for the House of Commons to pry into reasons about the export of arms to other countries.
This argument has come from almost every quarter of the House—that it has been the "traditional" attitude of our Governments not to give information about the sale of arms abroad. But that depends on what one means by "traditional", and I go back further on that point than some hon. Members.
I remember that in 1919 the coalition Government of Lloyd George and in 1925 the Conservative Government of Mr. Stanley Baldwin helped to negotiate international conventions under which no exports of arms were to be allowed by any signatory Power unless a licence had been issued by the Government of the exporting country, unless a licence had been issued by the Government of the importing country and unless those licences had been transmitted to the League of Nations and published by the League before the export took place.
There were difficulties about the ratification of those conventions, but the system, in effect, worked for most of the years between the wars through the Armaments Year Book and the Statistical Year Book on the Traffic in Arms which the League brought out for every year from 1924 to 1938.
If we are talking about tradition, my hon. and learned Friend the Member for Northampton (Mr. Paget) is right in saying that this country has thought of the arms trade as a dangerous and sometimes evil thing, and that we have sought to control its evils by the maximum publicity which can be obtained. I believe that those arguments apply today and I do not accept what the Government say about our "traditional" attitude in the matter.
I do not argue the question further now, because I want to come to a strange episode in the present Government's record which occurred not long ago, an episode which was strangely comparable to the sale of Chieftains to Libya which they propose today.
In December 1965 there were rumours that Her Majesty's Government proposed

to sell missiles and aircraft to Saudi Arabia. My hon. Friend the Member for Watford (Mr. Raphael Tuck) was gravely disturbed, and he tabled a Question to the Prime Minister asking him whether he would propose to President Johnson and Prime Minister Kosygin that there should be an international agreement not to sell arms to nations in the Middle East pending the preparation of wider measures for arresting the arms race. The Prime Minister replied that he would welcome an opportunity to discuss those matters, but he added:
… but I am not convinced that the time is right for my hon. Friend's proposal".
My hon. Friend then asked in a supplementary question:
Would my right hon. Friend agree that … the arms would constitute a formidable addition to the striking force of that country and, therefore, create grave anxiety in places like Israel … and will inevitably start up a new phase of the arms race in the Middle East?"—[OFFICIAL REPORT, 7th Dec., 1965; Vol. 722, c. 241.]
The Prime Minister replied that he did not dispute the broad principles of what my hon. Friend had said but that the difficulties at the time were so great that no effort should then be made to try to stop the sales of arms.
My hon. Friend tabled another Question a week later, on 13th December, this time to the Foreign Secretary. Unfortunately, he received only a Written Answer. My hon. Friend asked:
… if he will make a statement on what Great Britain is supplying or proposing to supply to that country"—
Saudi Arabia—
in the way of arms.
This was the singularly disingenuous reply:
British firms have submitted proposals to the Saudi Arabian Government, but I regret that I am not in a position to give the details."—[OFFICIAL REPORT, 13th December, 1965; Vol. 722, c. 187.]
In the light of subsequent events that was not a particularly candid answer, for eight days later, on 21st December—just as the House was about to adjourn for the Christmas Recess—the Parliamentary Secretary to the Ministry of Aviation volunteered this statement to the House, and I urge the House to note the bearing of this on our alleged "traditional" attitude:
I have to tell the House that the Government of Saudi Arabia have this morning


announced that a consortium of British firms has secured the major part of the order for their new complete air defence system. … The value of the British components in the order, including Lightning and Jet Provost aircraft, radar and data handling equipment, is over £100 million, from which over £75 million will accrue to this country as export earnings.
Then the Parliamentary Secretary made the following comment:
This is a great achievement for the three British firms concerned. … During the past twelve months the British firms have acted in close co-operation with my Department and have received our active support. The success of these negotiations has demonstrated conclusively the results which can be achieved with such co-operation. A number of other countries have already expressed interest in the Lightning. …"—[OFFICIAL REPORT, 21st December, 1965; Vol. 722, c. 1873–4.]
Was not that singularly like what Sir Basil Zaharoff said to Greece and Turkey when he sold them the first submarines? If Saudi Arabia was to get Lightnings, then its neighbours should have them too!
That episode was very like the one we are discussing today. Of course, I understand the arguments which were used then to defend the sale of arms to Saudi Arabia. It was said that the aircraft and missiles were defensive; that if we did not get the gold, others would; that the sale would increase our influence for peace in the Arab world. I utterly rejected those arguments in December, 1965, and I reject them now.
The aircraft and missiles added greatly to the offensive power of Saudi Arabia. The sale—a massive one by any standards—started, as my hon. Friend predicted, a new escalation in the arms race in the Middle East. Russia immediately hastened to sell other arms to Egypt and the United States to sell them to Israel. The arms race grew in fury from that moment onwards, tension became intolerable to all concerned; and in June 1967 we had the war, just as we had had the arms race, which my hon. Friend the Member for Watford had predicted in 1965.
We got £75 million for our balance of payments from the sale. But what did we lose from the 1967 war? The closure of the Suez Canal; the rise in the price of our imported petrol; the loss of

normal trade with the Middle East; and, above all, another great rent in the Charter of the United Nations, which was fast becoming a scrap of paper—the Charter which enjoined that all disputes should be settled by peaceful means.
I do not try to quantify what the June war has cost us, any more than I impute full responsibility to us for its outbreak. I merely say that we played a very dangerous part in starting the accelerated arms race from which the war resulted. What, broadly, was the scale of the cost to Britain? The closure of the Suez Canal in the first year after the war cost us, according to official estimates, £200 million. This year it is still costing us at the rate of £60 million a year, a large item on our balance of payments.
The sale of those aircraft and missiles to Saudi Arabia was a gigantic and grisly mistake, for the June war was an arms race war, if ever there was one.
The plan to send £40 million worth of Chieftain tanks and Abbot guns to Libya may be a mistake of the same disastrous kind. After all, the Middle East is now virtually in a state of war, and there is the disturbing fact, which other hon. Members have mentioned, that we are one of the four Powers which are supposed to be considering in the United Nations how a settlement can be found.
I say without hesitation that, while we are in that consultation, we should stop all sales of arms to all the parties in the Middle East. We should invite Russia, America and the others to do the same, of course. But on this occasion I would stop the sales ourselves, even if the others did not. We should set an example to the rest. As a first step, I hope the Government will cancel this lamentable proposal to sell Chieftains and Abbot guns to Libya, and I hope that the Foreign Secretary will tell us that the Government will take that step today.

5.5 p.m.

Mr. Dennis Walters: The hon. and learned Member for Northampton (Mr. Paget) managed, when opening the debate, to speak without once referring to British interests. This attitude is typical of Zionist supporters, because they appear to be so much more concerned with the interests of Israel.
To me, Israel is another foreign country in the Middle East. Britain has an important responsibility for its creation and, therefore, also has an important responsibility to see that it is not swept into the sea. However, Britain has an equally significant responsibility towards the indigenous inhabitants of Palestine whose future and existence we guaranteed under Part II of the Balfour Declaration and who have been progressively thrown into the desert while the Israelis have not been thrown into the sea.
My hon. Friend the Member for Macclesfield (Sir A. V. Harvey) took up certain points made by the hon. Member for Woolwich, East (Mr. Mayhew) and, in particular, referred again to statements which are alleged to have been made about the annihilation of Israel and the destruction of that State. Those statements have not been made. It has been categorically said not only by King Hussein and President Nasser, but also by the leader of E1 Fatah, the Palestinian resistance movement, that the obliteration of Israel is not their aim. The aim of even the most extreme Palestinian groups is the creation of a bi-national State in Palestine in which Jews and Arabs can live together. This may be an impractical objective, but it is important that the facts should be presented as they are.
The hon. and learned Member for Northampton apparently failed to see that the supplies to Libya are not unconditional. The Foreign Secretary intervened to clarify this point, which was already clear to anybody who wished to take the trouble to study what the Treaty of Alliance and Defence, which was signed by Britain and Libya in 1953, actually said. It is a treaty of alliance and mutual aid. With this treaty there is also a defence commitment which is quite clear and which envisages co-operation in training and in the supply of military equipment. A quid pro quo from Britain's point of view is that we have training facilities for British troops in Libya which are important and we have over-flying rights over Libya which are also important to Britain.
King Idris has been an old friend of this country. He was thrown out of Libya in 1940 by the Italians and has always been a friend of Britain.
I am glad that one of the things which has emerged is that what the supporters of the hon. and learned Member for Northampton are concerned about is not stopping the supply of tanks to Libya, but the failure to supply tanks to Israel. The hon. Member for Woolwich, East made a number of very good points on why it is undesirable at present to supply tanks to Israel. The uproar which has arisen, both in the public and in the Press, is all part of a vast operation which has coincided with the visit of the Israeli Prime Minister to this country.
If one looks at the statements made by the Israeli Prime Minister while she is here it is significant to note that although she puts herself forward as the apostle of peace she also clearly rejects in advance any international advice and recommendation and implies very crude and violent threats against Arab countries. This is an unattractive combination of the sob story and threats, and we so frequently hear both.
This morning, in The Times, there was a report about nine Arab houses having been blown up in Jerusalem. This has frequently happened before and these are facts which follow a systematic policy that has been going on for the last two years.
As the hon. Member for Woolwich, East rightly said, inevitably there is an escalation of brutality when one country continues to occupy the territory of another. One act of violence breeds another and violence grows. What we want is a settlement which Israel could have obtained and, I believe, still can obtain, with adequate safeguards protecting her frontiers. But, on the other hand, it is not possible to start a negotiation by saying that it will exclude Jerusalem.
We cannot exclude Jerusalem, because while it may be true that no Israeli Government can give away Jerusalem and stand it is equally true that no Arab Government can give away Jerusalem and stand. A compromise solution must be found whether it is a corpus separatum or some other form of international status. It is this towards which we should be looking. It is dishonest to present an impossible condition in advance of a negotiation and then say that you are willing to have a settlement.
I hope that we shall stand by our agreement, our perfectly firm commitment to Libya that we shall supply her with arms, and that it is clear there is no parallel between the supplying of tanks to Libya at this moment of time and the supplying of tanks to Israel, at this moment. Israel's military superiority, which has been clearly affirmed in two wars, is constantly boasted about by Israeli leaders. They cannot have it both ways. Either they are so strong that at any time they can reach Damascus or Cairo and are not doing so only because they are immensely kind and considerate, or they are weak and need protection. The presentation of both cases at the same time makes it intrinsically unlikely that they are telling the truth.

5.14 p.m.

Mr. R. C. Mitchell: It is very important to separate the two issues in this debate. I do not think there is any connection between the sale of tanks to Libya and the decision not to sell tanks to Israel. These should be taken as separate issues and we should discuss them separately just as we discuss separately whether to send arms to South Africa, Portugal or any other country. These things should be judged on their merits.
A few months ago I asked a supplementary question of the Secretary of State for Defence. I asked who our friends and allies in the Middle East are. That caused a little amusement in the House, and I did not get an answer from the Secretary of State. Perhaps I may try to answer my own question. I should say that undoubtedly, when we think of the nations in the Middle East, the one which has been most consistently friendly to Britain, certainly since the last war, is Libya. Under the rule of King Idris and successive Governments, it has been a consistent friend of Britain for 25 years.
Libya is a large country territorially with a very small population. Anybody who believes that Libya has aggressive intentions against anyone is living in a different world. Thirty-five years ago Libya was probably the poorest country in Africa. Today, if we take national income per head of the population, she is probably the richest. This has come about largely through the discovery of large quantities of oil there. It is quite

natural that any country which has developed its oil supplies should want to defend that wealth against any would-be aggressor. It is therefore quite natural because of our friendship with Libya that she should look to Britain for supply of arms which she needs for her defence.
The Libyan Navy has been largely built in British shipyards. A year or so ago Libya concluded a £100 million deal with B.A.C. to provide an air defence system. I happened to be in Libya when that agreement was made. There were four Members of Parliament there, and we held a Press conference at the end of our visit. We were asked by Libyan correspondents against whom we thought they were buying expensive equipment to defend themselves. I said that it was a question not for us but for the Libyan Government. It is obvious that Libya wants to defend herself, not necessarily against Israel but against any of her neighbours who would look enviously at her oil wells and think that they can be taken. To imagine that tanks from Libya would find their way into Egyptian hands is to imagine something which is very far from reality. There is a case for continuing to supply arms to Libya as we have done over a long period.
The second and much more difficult question is whether we were right to refuse to supply Chieftain tanks to Israel. I do not want to get involved in the rights and wrongs of the Arab-Israeli conflict. I believe there have been and are great faults on both sides. However, one cannot help admiring—purely as a military operation—the Israeli performance during the six days' war even without Chieftain tanks. I believe the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) said that there would be a case for supplying arms to Israel if by not doing so we were creating an imbalance in the supplies of arms in that area. It is true that Egypt is getting large arms supplies from the Soviet Union, and equally true that Israel in the past has received and will in future receive quite substantial supplies of arms from the United States of America.
We should be placed in a very difficult position if we agreed to sell arms of this nature to Israel and then received a request from Egypt for a similar supply of arms and refused to sell them there. Therefore, because these are


nations which are still in a state of armed conflict, with regular firing still taking place across the canal, on balance it is better to take the view that we should not sell arms to either Egypt or Israel. That is entirely different from the sale of arms to Libya, which is not involved in the conflict.

Mr. Paget: Does my hon. Friend imagine that Egypt is a free agent to buy arms from us any longer?

Mr. Mitchell: Yes, I am sure that this is so. Before this group of Members went to Libya, we went to Cairo and were fortunate enough to have a one and a half hour talk with Colonel Nasser, during which it became obvious that the reason why Egypt was buying large quantities of arms from Russia was that it could not get arms from us. Most Arab countries would rather buy arms from us than from the Soviet Union.
In conclusion, it was on balance correct for the Government to decide not to sell these tanks to Israel but to continue to sell tanks to Libya under our long-term agreements.

5.22 p.m.

Mr. Philip Goodhart: I agree with the hon. Member for Southampton, Test (Mr. R. C. Mitchell) that Libya has been a long-standing friend of ours in the Middle East. I have no quarrel with the suggestion that we should sell arms to Libya. It is, unfortunately, a fact of life in the Middle East today that we have a very substantial arms trade. We have sold arms worth hundreds of millions of £s to Saudi Arabia and to Kuwait, to the benefit of our balance of payments. We shall also profit substantially from the Libyan arms deal. Naturally, we are not anxious to see the sale of arms become a major factor in our balance of payments anywhere in the world. However, it is reasonable that our friends in the Arab world should have a source of supply for their weapons outside the Soviet Union.
Our trade with Israel is important to us, too. Last year our favourable balance of trade with Israel was £42 million. The Israeli arms market is substantial. During the past 14 years the Israelis have bought arms worth more than £300 million from the French alone. It is plain that the

Israeli need for weapons will not disappear in the near future. The Israeli contract for Chieftains would probably have brought Britain trade worth from between £40 million and £50 million.
The Arab countries do not want our trade with Israel to prosper. They would like it sharply to diminish. The Foreign Office made a tactical mistake when some time ago it made inquiries of our missions in the Arab States as to what the reaction would be to the sale of Chieftains to Israel. This was inviting the Arabs to blackmail us—and blackmail us they most certainly did. Whether it is right or wrong, the Arab countries believe that they have squashed this deal because of the threat of economic reprisals against Britain. If we once embark upon this path of giving into economic blackmail, as we regrettably have, we shall be tried all the more harshly in future.
Apart from the factor of trade, important as that is, Britain has a substantial interest in maintaining good diplomatic relations with Israel. The four-Power talks are now taking place. It may be that when those talks end Britain will be urging on Israel a course of action that not many people in the Israeli Government think will be right for the interests of Israel. Can the Foreign Office at that moment then claim to be the friend of Israel, putting forward advice that it would be in Israel's best interests to take? It would be difficult to argue this after the story of the Chieftain tank contract.
As a number of hon. Members have said, the story began many years ago with the sending of two Chieftain tanks out to Israel for evaluation. Clearly, the Israelis recognised that the Chieftain was an excellent tank, but it was by no means a unanimous view. There was a view within the Israeli General Staff that the Chieftain was not the right tank for Israel.
In the course of the 12 months following the six-day war the arms salesmen of Britain encouraged the Israelis to put in an order for this tank. It was the pressure of the arms salesmen and the information that they could give to the Israelis that in the long run swung the tide in Israel in favour of buying Chieftains. It was the British who were encouraging the Israelis to put in an


order for this tank. Long technical negotiations ensued and a substantial number of modifications to the Chieftain were agreed upon between the British and the Israelis. After months of negotiation and pressure from Britain to Israel to get the Chieftain, the Foreign Office then said that the Chieftain tank should not be supplied.
If the Foreign Secretary then turns to the Israeli Foreign Minister and the Cabinet and says "We have your interests at heart. You should withdraw. Despite the fact that you are anxious about this, we will look after you", will he then be believed? One of the dangerous things about the events of the last few weeks is that the conduct of the Foreign Office has gravely discredited British diplomacy in Israel.
There is an over-riding British interest in peace in the Middle East. It is essential to the maintenance of our trading and diplomatic position that peace should continue.
What are the main dangers to peace? To my mind, the immediate danger to peace in the Middle East is that Arab hawks who are anxious for another round of fighting with Israel should gain the upper hand. There is a possibility that this could happen. The hon. Member for Penistone (Mr. John Mendelson) was reproved for bringing in a newspaper which had the headline: "Alert from Cairo to the Suez".
There is a danger that fighting will break out because Nasser has said in a speech that 60 per cent. of Israeli fortifications along the Suez Canal have been destroyed. That is totally false. However, an Egyptian intelligence officer has to base his appreciation of the situation on what the President of the country says, and it will hardly be surprising if he says "Yes, by all means let us have a foray across the Canal".
The immediate danger to peace in the Middle East comes from an Arab miscalculation of the strength or relative weakness of Israel. Anything that makes the Arab hawks think that Israel is weak and getting weaker will encourage them to launch yet another attack, even if it is on a more limited scale than in the past.
The long-term threat comes from an Arab refusal to negotiate seriously with Israel. I believe that our refusal to sell

tanks to Israel will give Nasser an excuse to proscrastinate still further and not seriously negotiate with Israel about its future place in the Middle East. I am depressed by the hypocrisy that the Government have shown recently. The Foreign Secretary likes to say to visitors that it is the principle objective of British policy in the Middle East to see that the State of Israel is preserved. Yet at the same time, having encouraged the Israelis to order British weapons, we turn round and refuse to let them have them. I am shocked but not surprised, because the Government have an almost unique reputation for letting down their friends, at home and abroad.

Mr. Deputy Speaker: Order. Before calling the next speaker, I would remind succeeding speakers of Mr. Speaker's appeal for brief speeches.

5.33 p.m.

Mr. Colin Jackson: It seems that the arguments of my hon. and learned Friend the Member for Northampton (Mr. Paget) can be divided into two parts, one to do with the sale of arms to Libya and the second part an attempt to link this with the sale of arms to Israel. The first link of the argument, the sale of arms to Libya, has suffered badly this afternoon. There was quickly destroyed the argument that the sale of arms to Libya was unconditional. We have not had mentioned in the House the question of Libya being in a state of war with Israel. I imagine that this is because it is one of the most patently weak arguments that can be produced.
Libya is a supporter of the United Nations resolution of 22nd November, 1967, which would agree to a state of non-beligerency between that country and Israel if Israel would withdraw from the territory she now occupies. The implications of a state of war prove to have no validity. We have heard from many speakers warm tributes to Libya as a friend of the United Kingdom. I am surprised that we did not have a more genuine tribute from my hon. and learned Friend, because Libya has been one of Britain's best friends over a long period of time and we have good reason to be proud of her as an ally. If we wish to maintain friends in the Arab world we should recognise this.
Then there is the question of the rule of arms to Israel. The United Kingdom


is in a particularly pivotal position with regard to success or failure in attempts to reach a Middle East settlement. The Soviet Union is largely committed on the side of the Arab nations. The United States, with its sale of Phantoms, is clearly very much an ally of Israel. France is more or less out; until the new President takes up a public stance we do not know what his policy will be. The United Kingdom, with our representative in the United Nations, Lord Caradon, has probably the most finely-balanced opportunity to secure a settlement.
Had we agreed in May, with the Big Four talks beginning, to supply arms to Israel, that could have vitiated all opportunities of the United Kingdom in achieving a break-through towards a settlement. Libya is in an entirely different position from Israel over the supply of Chieftains. Israel is involved in the occupation of the territory of three Arab nations: the United Arab Republic, Jordan and Syria. She is deeply involved in present-day conflicts. Had we supplied Chieftains to Israel, one of two things would have happened Either all opportunity of Britain being able to mediate in a settlement would have been lost or we should, logically, have had to supply Chieftains to Syria, U.A.R. and Jordan. This would have been wrong.
On a moral judgment, I do not believe that this country at this stage should supply arms to a nation which refuses to co-operate with the four Powers' permanent Security Council members of the United Nations. I do not believe that this kind of action should be rewarded. I do not believe that a fundamental devotion to the United Nations is biased: it is decent policy, and those who wish Israel to survive in peace would be well advised not to press the Prime Minister of Israel to follow a hard line. The friends of Israel would be well advised to require that country to meet the obligations of the United Nations; they would be well advised to say to Israel, "Stop blowing up buildings in Jerusalem, and obey the United Nations"—[Interruption.] Those who cannot listen in silence—

Mr. Shinwell: Rubbish! Be quiet!

Mr. Deputy Speaker: Order.

Mr. Shinwell: Who called "order"?

Mr. Deputy Speaker: The Chair called "order".

Mr. Shinwell: Not when I hear this sort of rubbish. No one can say that it is anything but rubbish.

Mr. Deputy Speaker: Order. The hon. Gentleman has the floor. If the right hon. Gentleman wishes to intervene, perhaps he will do so in the normal manner.

Mr. Jackson: I have no desire to hear any more of the right hon. Member; ha has condemned himself out of his own mouth.
Britain has an equivocal opportunity to secure a settlement through the United Nations resolution of 22nd November. At this stage I do not believe that it would be right to supply arms—Chieftain tanks—to Israel.

5.40 p.m.

Mr. James Davidson: I hope that I am right in assuming that we are debating not the rights or wrongs of the Arab-Israeli situation but whether or not we should be sending Chieftain tanks to Libya. I want to touch on the background of arms exports and arms sales because the morals or principles of the export of arms have a very powerful bearing on this question. It cannot be considered in isolation but at the same time, at the risk of being slightly ambiguous, we must look at each case on its own merits.
I want to ask first whether we can justify exporting arms in any circumstances. The answer is pretty obvious: yes, we can, if we are exporting arms to allies, if we are exporting arms to democratic countries, to help them preserve their independence against advances by another power. I do not think that there is any real justification for a complete ban on arms sales unless this country cares to take up a pacifist stance. If we were to do that there would be no arms to sell.
We should not determine the policy of whether we export arms to a particular country, or Chieftain tanks to Libya, on financial grounds. This should not be a matter of financial reasoning; it should be done perhaps in spite of the export potential, but not because of it. If the sale of arms to a friendly country in a good cause at the same time assists our exports, so much the better, but this must not be a major consideration.
It must be quite obvious that we must limit the risks when we consider to whom we are selling arms. We do not want to sell arms to countries which will undermine British interests. Here the export licensing procedure is a sufficient safeguard. We do not want to export arms to areas where such arms will exacerbate regional instability. We do not want to export arms to dictatorships or to petty sheikdoms, to autocratic little kingdoms. We have heard much about the friendship of Libya. I do not know a great deal about Libya but I spent two years in the Middle East and it used to worry me quite a bit that the apparent friendship of some of these Arab countries seemed to be limited to a certain stratum of Arab society. It was not a friendship stemming from the people but a friendship stemming from those who ruled the remainder of the population with an autocratic kind of rule.
Certainly I do not think that we should be exporting arms to military juntas in any circumstances. In that context, although in this current year I understand that we are to sell about £170 million worth of arms overseas and if we were to cease doing so it might be a considerable loss to our exports, on the other side of the ledger we must consider that over the 10 years from 1967 to 1977 we are likely to import about £1,050 million worth of arms from the United States alone.
Obviously, we must be certain not to export arms to a country which might later use them against a third country in violation of our foreign policy aims, and I suggest that we should never in any circumstances export any type of nuclear, chemical or biological weapon, because we do not know what sort of trouble we may be laying up for the future if we do so.
To return briefly to the export of arms to Libya, it has been said that Libya is a member of the Arab League and yet that she is friendly to this country. It is true that a state of war exists between Libya and Israel. On the other hand, from what I know of Libya, she is more concerned at being over-run by Egypt or Algeria than at defending herself against or attacking Israel. That is as may be, but it seems to be all the

more reason to press, through the United Nations, for an international embargo on arms to the Middle East.
Arguments have been raised about the difference between defensive and offensive weapons. It is almost impossible to draw a line between the two. Perhaps a good argument could be made out for exporting aerial defence systems to Middle East countries, because they can hardly be used for offensive purposes. But where is one to draw the line? It is a very shaky and indefinite one.
As for the Chieftain tank, my facts are open to correction but I believe that it costs about £200 per hour to operate. It has a maximum range of about 200 miles without refuelling. At a speed of 25 m.p.h., it can go for about eight hours without having to stop and refuel. It is heavy. It weighs over 50 tons. It carries a very heavy gun which has a range of 3,000 yards with armour-piercing shells and about 7,000 yards with high explosives. It can carry only 64 shells, and it is very vulnerable to certain current types of anti-tank weapon. Does that make it a defensive weapon or an offensive one? I should not like to judge. If the Secretary of State for Defence were here, he might also be able to say whether those facts make it a cost-effective weapon. I think that that is questionable, too.
While a state of war exists in the Middle East, I believe strongly, and I am sure that most of my Liberal colleagues support me, that there should be a complete embargo on all arms supplies to the Middle East. I realise how difficult it is to obtain such agreement through the United Nations, but surely that should be the aim. In this instance, we could set an example. It might be wishful thinking to assume that others would follow the example, but I think that we should set it. Financial considerations must be of secondary importance.
If a state of peace existed in the Middle East, it might be argued that the supply of arms to either side would serve as a deterrent and thereby help preserve the peace. But there is not. There is a state of war. By supplying arms to either side when there is a state of war, we are adding fuel to the flames, even if that fuel is not to be ignited immediately.
On balance, I take the view that while there is a state of war in the Middle-East it should nullify any arms contracts that we have already made. We should not send arms to either side, until some conclusion is reached or an agreement comes out of the four-Power talks.

5.50 p.m.

Sir Barnett Janner: By this time, I hope that the House would be able to assess the kind of argument which is being advanced by some who are taking an evenly balanced view and by others, including hon. Members on this side of the House, who for years have attacked Israel and who use every possible opportunity of avoiding the issues which are before us.
While I agree with the hon. Member for Aberdeenshire, West (Mr. James Davidson) that if all the parties decided not to supply anyone that would be an entirely different matter, no one would be more anxious about that than Israel, because she has everything to gain from peace. She does not want war, and she has never wanted war. Two vicious wars have been waged against her, quite apart from border attacks.
When those wars finished, the great Powers, including ourselves, urged a victorious Israel to accept certain terms. Those terms were accepted by both sides. In a matter of days, the other side again attacked Israel.
What did the Powers do? Nothing. What is the use of talking in unrealistic terms? Israel had to depend on herself, as she did in 1967. Let us be frank about the position. If the four Powers or anyone else attempt to get a settlement which Israel does not believe to be one that will secure her existence, she cannot afford to allow herself to surrender to the venom which is preached in order to attack her. Israel has to have weapons with which to defend herself. She asks for no men. She does not ask for a single person, other than the Israelis themselves to face her enemies—in spite of the enormous forces against her.
What happened when the 1967 war broke out? From where were the tanks and aeroplanes bought that were used against Israel? What is the use of hon. Members opposite saying that Israel should accept the terms of the Security

Council when they know that Israel is prepared to accept them and that those who are not prepared to accept them are the Arabs and the very people who are urging and instigating the Arabs to continue to attack Israel? Day by day, attacks are made in spite of the ceasefire. Day by day, venomous statements are made that Israeli is to be destroyed. They are made by the very people who know very well that they speak with their tongues in their cheeks when they say that they are prepared to accept the Security Council resolution.
The Security Council resolution recognises Israel as a sovereign State. There is no mention of Palestinian new States. There is not sufficient time to go into all the issues in this debate, but the fact is that the Arabs do not accept the Security Council resolution any more than do hon. Members of this House who support the Arabs. They say that Israel must disappear, with another kind of State created in its place. However, they will never fool the whole world about this, and therefore I appeal to the Government.
I am sure that the House will agree that, although Libya is at war with Israel, she wants arms for certain purposes. Some hon. Members know the purposes for which she needs them. But why deny Israel the possibility of defence? In Israel, some children have been living in shelters for two years, barely coming out to see the sun, in consequence of the attacks of those who will not recognise the State of Israel and who are still at war with Israel—and I include among them some hon. Members of this House who speak in favour of the Arab States.
The Government should realise that the very least that can be done is to let Israel have the necessary means of defending herself. If those hon. Members who have spoken against Israel had listened to her Prime Minister speaking, they would have realised that here is a human person who wants peace, who is anxious that there should be no war and who wants to live a normal life in a nation which is prepared to build and act in a civilised way. That is all that Israel wants.

Mr. John Lee: rose—

Sir B. Janner: No, I will not give way. I did not interrupt any other hon. Member, and there were many occasions on which I was provoked to do so.
Israel needs the assurance that she will not again be let down as she was in the past. She does not require men from the armies of other countries. She wants the means to protect herself by herself against the vicious forces ranged against her. Why do some talk such nonsense? Do not they know that Russia supplies everything in the way of arms that Egypt wants? Hon. Members talk of the balance of arms; but what balance can there be? If we stop supplying arms to Israel, Russian will nevertheless continue to pour in whatever Egypt wants, and so will some other countries.

Mr. John Lee: I agree with a great deal of what my hon. Friend says, but is the nub of his proposition that if we were to resume arms supplies to Israel, for which there is a strong case, that would justify the continuance of the supply of arms to an undemocratic country like Libya?

Sir B. Janner: I could use arguments which would help my hon. Friend in the view that he holds, but I will leave that point on one side, because I am concerned with the protection of innocent, decent, civilised people who are our friends. The Prime Minister of Israel has said that it is bad enough that they have Russia against them in the four-Power talks and it is bad enough that they have France against them, because it is no good relying on what France may do, and she asks "Do not their own friends realise that what is necessary is the means to allow them not to be ground into the earth and destroyed?
No one can tell me that when Nasser says that he intends to destroy Israel he does not mean it. No one can tell me that he does not believe that orders were given to the Jordanians to kill every woman and child in the places which they attacked in Israel. In those circumstances, I ask the Government to reconsider their decision and provide these weapons to Israel. It will not be a question then of our having to mourn in sympathy over the destruction of men, women and children in Israel. On the contrary, we shall be helping innocent people to defend themselves.

6.0 p.m.

Mr. W. H. K. Baker: May I take up the point made by the hon. Member for Woolwich, East (Mr.
Mayhew), that the Israelis had rejected the British-sponsored resolution of the United Nations? With respect, the hon. Gentleman is wrong. The Israelis did not reject the resolution, but accepted it as a basis for negotiating a lasting peace in the Middle East, and they should be given credit for having done so.
Almost exactly a year ago, with three other hon. Members, I visited Cairo, Egypt, the Sudan and Libya. It was abundantly clear, both overtly and covertly, that Libya was the only one of those three countries which had not received or was not about to receive considerable supplies of arms from the U.S.S.R. I was led to believe, as I think those hon. Members who were with me would agree, that Libya had successfully brushed aside blandishments from the Russians for the supply of arms. I give them all credit for that. But the Libyans did so because they felt that they had with Britain a close and sympathetic friendship.
Several hon. Members have mentioned that there is a state of war between Israel and Libya. That may be so, but, in my view, that is a mere technicality. There is no evidence of Libyans having taken part in the six days' war two years ago, or having been involved in the previous engagements between Israel and the Arab States. Certainly, Libya is an Arab country, but we miss the point if we classify the Egyptians as Arabs. The Libyans have been on the side of the Arabs purely as a matter of Arab solidarity.
There is no doubt that predatory and avaricious eyes from both east and west of Libya are focused on Libya's supplies of oil and natural gas. Those supplies are being exploited internationally to the great benefit of the people of Libya. Ten years ago the whole budget in Libya was about £5 million; it is now about £500 million. That is a measure of what is going on in the country, of the geographical situation of Libya and of what these avaricious eyes are focused on.
I support the supply of Chieftain tanks to Libya for three main reasons. First, in terms of our defensive alliance with Libya, Libya is friendly to us, and I am convinced that she is not interested in aggression. It is, therefore, right and proper that we should honour our obligations under the terms of the alliance.


Secondly, we have with the Libyans both training rights and over-flying rights which are basically important to the security of the Middle East. Thirdly, the traditional friendship which exists between our two countries has been broadened lately by a closer relationship between Libya and Malta, which gives us an ever-increasing link with Libya.
Whether or not the Chieftain tank is an offensive or defensive weapon does not matter in the context of this debate or of the agreement, for I am convinced that the tanks will be used in Libya only for defensive purposes. Last year a defensive contract for air defence was concluded between Libya and firms in this country to the value of about £200 million. Those weapons were in no sense offensive, but defensive, and if they are split, as I believe them to be, with more than half on the western Libyan frontier and the remaining portion on the eastern Libyan frontier, this provides conclusive proof that Libya is seeking the defence of her own land and resources.
The Libyans are not anti-Semitic. When we were there we had conclusive evidence to show that they were anything but anti-Semitic. If they were, I would not be as much in favour, if at all in favour, of the supply of Chieftain tanks.
I add only one rider, which was mentioned by my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser). If our own reserves of tanks were to be depleted, or put at risk, I would be against the supply of the tanks; but unless and until we can get a four-Power agreement upon the supply of offensive and defensive weapons to the whole of the Middle East, I support the Government in what they are doing.

6.5 p.m.

Mr. Donald Anderson: It frequently happens that debates on the Middle East degenerate into a refighting of the whole Arab-Israeli conflict. At the emotional time of the June war I recall being asked by a colleague whether I was an Arab or an Israeli, to which I replied that I was British. I am more concerned with the paramountcy of British interests in this matter.
As can be seen from the debate, the Chieftain tank deal with Libya is

eminently in our own interest. What is much more arguable is whether the refusal to supply Chieftain tanks to Israel after allegedly leading Israel up the garden path, is in the British interest.
I support the British Government's attitude of looking at the total supply of arms in this area in the context of the power balance. In 1967, Britain ceased to supply arms to the Middle East in the hope that other countries would follow suit and that there would be a total arms embargo. Our confidence on this occasion was misplaced. Reluctantly during the past two years we have resumed the supply of arms to the Middle East, while maintaining on the whole a reasonable balance.
I think that most hon. Members accept that the leg of the Motion that this country should supply arms to Libya is not really in question, although it is worth while saying something about it since the hon. and learned Member for Northampton (Mr. Paget) made some rather unhelpful remarks about the Government of Libya.
As has been stressed, Libya is an old ally of this country. We have there a base and training facilities which provide unique opportunities for military training. Libya has rocketted from rags to riches and, in addition to all the attendant problems, there is a vast programme of modernisation. The United Kingdom has a considerable commercial stake in that country, particularly in regard to oil. We have also a considerable political stake in the area in ensuring that the southern side of the Mediterranean does not become entirely a Soviet-dominated lake.
Libya is sensibly concerned about her own defence and the protection of her new-found treasure. As has already been mentioned by the hon. Member for Banff (Mr. W. H. K. Baker), Libya's first priority last year was to order from the United Kingdom an air defence system, which suggests that she is not in terms of priorities particularly concerned with foreign adventures. Now she is turning to the reorganisation of her army.
Libya is, of course, a member of the Arab League and is devoted to the Arab cause. Yet in Middle East politics she has pursued a moderate course and there is every indication that the arms supplied would be used in her own


defence. Both from the point of view of distance from the major source of conflict in the Middle East and in the light of past experience of Libya, I would suggest that there is every evidence that these arms will have no relation whatever to the Arab-Israeli conflict, but I welcome the assurance from my right hon. Friend that the tanks were not given unconditionally.
To turn briefly to the question of the possible supply of Chieftain tanks to Israel, Israel, on the whole, has had a good deal from this country. Friends of Israel will favourably compare the response of our own Government with the response of Gaullist France to Israel in February, in her time of difficulty, when our Government made it clear that they were not prepared to join in a unilateral embargo on arms sales to Israel. If, as the Israelis now claim, they need these arms for defensive purposes, we must recognise that, from the aspect of British interest, to many people, and not only in the Arab countries, this would be seen as giving material assistance to Israel in holding on to her occupied territory. Libya itself is not occupying any territory; Libya is not in breach of any United Nations resolution; and Libya is not adopting a negative attitude to the four-Power resolution.
The policy of Her Majesty's Government is clear. It is that they examine every arms application from the Middle East area very stringently and judge carefully the impact on the total balance in the area. Whether this balance is by the arms deal being put in question it is difficult for any back bencher to answer. This argues the need for greater expertise, perhaps by way of a specialist Committee of back benchers. Of one thing I am sure. We have received a request from a small country which has turned to us as its friends. They seek the tanks to assist them in organising their legitimate defence, and it surely is reasonable and proper that we should assist them to do so.

6.13 p.m.

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Michael Stewart): I welcome this opportunity to say something about our arms policy in the Middle East and about the Middle East generally. I have been asked to make a statement about the sale of arms

to Libya. I do not think that the House will charge me with deliberate discourtesy in deciding that that was not the thing to do. I have always tried to show the respect which is the House's due, but if I made a statement about the deal with Libya I should only have been able to tell the House what was already public knowledge.
That there had been an arms transaction with Libya was a fact already known and reported in the British Press several weeks ago; that it was conditional on the weapons being used solely for the defence of Libya followed from a public document, our agreement with Libya. I could not include in such a statement full details as to the numbers and categories of weapons. That has never been policy. There was a statement to that effect some years ago in the House by the right hon. Gentleman the Leader of the Opposition.

Mr. John Lee: The right hon. Gentleman said that the deal was conditional on use for defence. Two matters arise on that. First, what retaliatory action, if any, could the Government take if any of the conditions were broken? Secondly, what would happen if these arms were used for the repression of an internal uprising?

Mr. Stewart: In the particular case of Libya, I do not believe either of those considerations arise, and I would not wish to give an answer that could be interpreted as any imputation of bad faith by the Libyan Government. But to give the answer generally it would be a matter of common sense. If any country to which we had supplied arms on a condition like this had flagrantly broken the condition, there would be action which we could take on ammunition and spares. But this is a hypothetical question and answer, and I do not believe it arises in the Libyan context.
I am sure that the view taken by successive Governments that we do not spell out the full details of every deal is a right one in the interests of the peace of the area. I am quite certain that if every time there were arms deals of this kind published to the whole world, setting out exactly how many weapons of what capacity were involved, this would be likely—perhaps more likely than anything else—unhealthily to inflame the appetite


of every possible consumer of arms in the area. If I had made a statement I could have told the House nothing that was not already public knowledge.
It has been further apparent from the speeches in this debate that no hon. Member has confined himself, or could have confined himself, to the subject of the transaction with Libya. What the House was concerned about was the whole nature of arms policy in the Middle East and the Middle East situation generally. Frankly, that would not have been helpfully dealt with by means of a statement and the short exchange of question and answer that follows a statement. It was most properly dealt with by a debate.
I could not, therefore, agree with those hon. Members who suggested that this debate was a kind of misfortune that had fallen on the House, or on me, as a penalty for my refusal to make a statement. I do not believe that a statement would have been appropriate. I am happy now to do the best I can to answer the debate.
There is one part of it that can be answered fairly speedily and with the agreement of nearly all hon. and right hon. Members, on the question: why make a sale to Libya in particular? Libya is in a particular category. We have with her a treaty of friendship and alliance. My hon. and learned Friend the Member for Northampton (Mr. Paget), who opened the debate, said that he was conscious of the fact that he was standing where Sydney Silverman and Winston Churchill had stood. It was when Sir Winston Churchill was Prime Minister that the agreement with Libya was concluded. The pledge given in the agreement accompanying that treaty was concluded by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home).
When one adds to that the fact that Libya is at present the only major Middle East country which does not possess tanks, I believe that I can say that we were justified in carrying through this transaction with the Libyan Government. Most hon. Members have fully accepted that, but have based their criticism, or their concern, on other aspects of policy. It might therefore, be helpful if I now said something on the general policy which the

Government seek to operate in trading matters all over the world.
It is true that every export transaction, whether of commodities of peace or of war, is beneficial to our economy. That fact cannot be ignored when considering any transaction, although in many cases it is not the only factor to be considered.
We would be willing to conduct trade in the commodities of peace with everyone in the world, except in case of war, rebellion, or express resolutions of the Security Council of the United Nations. The House will remember that no resolution can go through the Security Council of the United Nations without our consent. The present Government have always held that if, by giving that consent, we let a resolution go through the Security Council, we are then bound to observe it.
I stress this point, because some hon. Members did not seem quite clear on the distinction between a resolution of the Security Council and a resolution of the General Assembly. We are not, either in law or in honour, bound by resolutions of the General Assembly to carry them out. We are, I suppose, bound to consider them sympathetically, to see whether there is anything that we can do to meet them, but we are not bound by them in the way that we are bound by resolutions of the Security Council.
That applies to peaceful trade with everyone, except in case of war, rebellion or resolutions of the Security Council to the contrary, as with Rhodesian sanctions.
Concerning trade in arms, it is at once clear that a large number of political considerations must be brought in and that each transaction has to be looked at in the light of all the surrounding circumstances. Sometimes there will be a factor that decides the case straight away. That is the case with South Africa where, again, there is a clear Security Council resolution to which this country agreed under the previous Conservative Administration. We therefore propose to carry it out. Although it was mentioned in the debate, this cannot really be urged as an example of inconsistency by the Government. At one point in the debate—

Sir Alec Douglas-Home: Perhaps I may correct the right hon. Gentleman about the resolution on arms to South


Africa. We reserved the right to export arms despite that resolution of the Security Council.

Mr. Stewart: In the debate that we had about this matter some years ago I explained that this was a completely nonsensical reservation. We said, in effect, "We will not use our plain right to veto the resolution, but we tell you that we will not carry it out." That is not the way to conduct business. If we did not mean to carry it out, we should have vetoed it—unpleasant as that can be.
I was about to say that one voice opposite was raised almost to suggest that we were wrong not to supply arms to Spain. If anyone is really suggesting that we should supply arms to Spain at this juncture, I hope that we shall have an opportunity to debate that matter at greater length, because many hon. Members will have things to say about it.
Concerning Nigeria, we must take into account that when she became independent we gave her clearly to understand that we were one, and only one, of her suppliers. To go back on that undertaking subsequently, when she was faced with a rebellion, would be the same as saying that we thought the rebellion was right—and that we did not think.
In many cases, and in the Middle East particularly, it is not quite as simple as that. In the cases that I have just mentioned, it seemed to me that there was a plain, deciding factor that made it very easy to make up our mind. It is not so easy in the Middle East.
Much of the debate has been concerned with what our policy ought to be towards arms supplies generally to the Middle East.

Mr. Hugh Jenkins: May I ask my right hon. Friend to clarify the Government's policy on the supply of arms to Greece?

Mr. Stewart: It does not seem that we have one of those absolutely clear factors here, as with South Africa. There is no Security Council resolution on Greece. My hon. Friend will be aware that we must take into account that Greece is allied to us in N.A.T.O. But, since the coming to power of the present régime in Greece, there have been no substantial supplies of arms to that Government.
In embarking on an account of what I believe are the right principles governing the Middle East, I must make one point clear straight away. I cannot undertake to disclose issues determining whether or at what time we should agree to make supplies of arms to particular countries. I am not saying that merely to make things easier for the Government, but for a reason which I developed earlier.
I believe that if, on any occasion when we made a supply of arms to a particular country in the Middle East, the full details were disclosed, this would not have a quietening effect on Middle Eastern politics. The strains and the pressures in every direction would be greatly increased. I thought that I ought to say that at the outset in talking about our arms policy in the Middle East.
We would certainly like to see either an all-round complete stoppage or at least an all-round limitation on arms supplies—indeed, this subject came up between Mr. Gromyko and myself a year ago—which could stem from a more general agreement about the Middle East. Failing that, we recognise that every country in the Middle East has a right to defend itself. Therefore, we do not impose against any country a general embargo or refusal at any time to supply it with arms.
We further recognise that perhaps the greatest danger would be to leave any country in the Middle East so disadvantaged as to tempt an aggressor.
I listened very carefully to what my right hon. Friend the Member for Derby, South (Mr. Philip Noel-Baker) said about arms limitation. Obviously, the world would be a better place if the level of armaments was much lower all round. But wars do not necessarily break out because both sides are fairly heavily armed. They are most likely to break out if one side is convinced that it has a substantial advantage and a real chance of victory.
That, above all, in the Middle East at this juncture, is what we must avoid. This is why it would not be right for us, failing all round international agreement on arms limitation, to say that we would set the example. If we completely stopped arms supplies and nobody else did anything, it would be much more likely to result in an unbalanced situation in


which one side would be tempted to attack.
Bearing these principles in mind, particularly the one that I mentioned last—the importance of not leaving any country so disadvantaged that it would be a standing temptation to an aggressor—we have in the past provided military supplies to Israel, including tanks. Decisions that have yet to be made will be made in accordance with the principles that I have just enunciated. I hope that the House will agree that that is the right way to approach the matter.
The right hon. Member for Stafford and Stone (Mr. Hugh Fraser) took up a rather different aspect of this matter. He feared that by a general handling of the sale of arms we were running down our own stocks, that we were putting our own defence in danger and weakening our influence in the world. The evidence the right hon. Gentleman supplied for that was not very convincing. He suggested that we were bringing to an end the tank training school in Libya. If he really means the tank training school in Libya, I must tell him that there has not been one for a great many years.
If the right hon. Gentleman means—and I accept that perhaps he did not choose the right words—the tank stockpile which is used for training exercises by the British Army, and the holding of tanks regularly used by units from the B.A.O.R. on training exercises, I must tell him that that is not only there, but is to remain there, and that there is no question of altering those arrangements.
The right hon. Gentleman also suggested that there might have been no Chieftain tanks used for manoeuvres last year at brigade level in the B.A.O.R. I am glad to say that the right hon. Gentleman is wrong about that, also. The right hon. Gentleman's speech showed that gift for violent language and unspeakable inaccuracy which has appeared in the Nigerian debates in which he has taken part. I cannot accept that.
The suggestion by another hon. Gentleman that it was a practice of ours to ask one group of countries in the Middle East almost for permission before making supplies to another has no foundation.

Sir A. V. Harvey: Will the right hon. Gentleman say why the Israeli Govern-

ment were at one stage encouraged to buy Chieftain tanks—in fact, they had two on loan from this country for trials—and then the Government reversed their decision?

Mr. Stewart: It is at this point that we reach the territory which I made clear to the House I could not answer. I am not going to state in detail decisions which have yet to be made, but I think that I can clear up part of the hon. Gentleman's anxiety by making it clear that there have not been discussions with the Israelis which could be construed as a "go-ahead" for the construction of facilities in Israel. That suggestion was made during the debate, and it is incorrect.
I cannot undertake to go into the details and particulars of what supplies we may be able to make, or think it right to make, to any country in the Middle East. I can only do what I have done, namely, make clear to the House the principles which will guide our policy, and they are principles which I believe the House will accept.

Mr. Biggs-Davison: Will the right hon. Gentleman tell us why these tanks were sent to Israel, for what purpose?

Mr. Stewart: No. I am sorry, but I must ask the House not to press me further on this matter. I have made it quite clear that it is not our intention to see any country in the Middle East at such a disadvantage as to tempt an aggressor.
Beyond this question there lie the hopes of all of us for a real settlement of the Middle Eastern question, and I by no means underrate the enormous difficulties of getting such a settlement. I hope that the House will also agree that the Government's approach to this matter has been right. I do not think anyone questions that the Government were right in the first place to sponsor the Security Council resolution which has been the basis of discussion ever since, and which is, at least in principle, accepted by all the parties to the dispute.
I thought that at one point my hon. and learned Friend the Member for Northampton was not quite fair to the resolution, when he spoke as though it would require withdrawal by Israel without any firm guarantee of peace. It


would not. The resolution speaks not only of withdrawal, but of secure and recognised boundaries, and a just and lasting peace, and it has been part of the British Government's position all along that it is the whole resolution which has to be carried through, and not the particular parts which one side or the other might favour.

Mr. Paget: I am sorry if I was misunderstood on that. Of course, I agree with that, but it resides in an atmosphere in which the Arabs say quite emphatically, "We will not even consider peace. We will not meet. We will not negotiate. We will not recognise Israel". Therefore, to say that there is an acceptance somewhere of this resolution seems to be unrealistic.

Mr. Stewart: My hon. and learned Friend talked about United Nations circles, with the implication that they were unrealistic, and I felt that I must correct that.
After the passing of the resolution we felt that we must support the work of Dr. Jarring in trying to get the resolution turned from a set of principles on paper into a workable programme for action. I am sure that we were right to encourage Dr. Jarring in that work. To me, and to many, it was a great disappointment that, through no fault of his own, he proceeded so slowly. What decided us to support the idea of four-Power talks was that we felt that without this fresh impetus there was little chance of Dr. Jarring by himself being able to perform the task which the United Nations had imposed on him.
I know the anxieties about the four-Power talks. They have been expressed

in the House, and by the Israeli Government. I therefore make it quite clear that in those talks we should not agree to anything which jeopardised Israel's security. We are not prepared to accept the whole case that is advanced by partisans on either side. In this debate I have heard a great many things said by partisans on one side or the other which I could not accept. We should never agree to any settlement—and we should not be the only ones who would refuse to agree—which jeopardised Israel's security, any more than we would agree to any settlement which encouraged aggression by either side.
Surely we are right to proceed in that manner. I cannot give prophesy what the chances of success are. It will be a frightful lost opportunity in the world if a settlement is not reached, because my belief is that any really well-informed and well-intentioned person could easily draft a settlement which all parties would know in their hearts was better than a continuation of the present situation. Whether reason will prevail over emotion and passion enough to get that recognised, I do not know, but we must go on trying. If we can get such a settlement, I believe that an agreed policy about arms might well follow from it, and over that we should rejoice.
In the meantime, I believe that the Government are right to carry out their undertaking to the Libyan Government and to proceed on the lines of the general principles which I have described to the House.

Mr. Paget: I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Orders of the Day — NATIONAL INSURANCE (No. 2) BILL

Order for Second Reading read.

Mr. Speaker: May I announce to the House that I have not selected the Amendment in the names of the hon. Member for Kensington, South (Sir B. Rhys Williams) and his right hon. and hon. Friends. This will not affect the debate. The reasons set down in the Amendment, together with other reasons for or against giving the Bill a Second Reading, can be advanced in the debate.

6.38 p.m.

The Minister of State, Department of Health and Social Security (Mr. David Ennals): I beg to move, That the Bill be now read a Second time.
Before coming to the main provisions of the Bill, I want to look at some of the problems with which it is intended to deal. The Bill is about how the fit, earning population fulfils its responsibilities to those who are not fit or earning, and as a civilised society we have a responsibility to ensure that the earners make an equitable contribution to the welfare of the non-earners, whether they be old, sick, widowed, or unemployed.
We must straightaway accept that the present National Insurance Scheme has grave weaknesses. On one hand, it provides for the retired population an income which in at least 2 million cases is inadequate for the maintenance of a reasonable standard of living. On the other, to pay out pensions even at the present level we have to impose a contribution burden which falls too heavily on the lower-paid worker. Both these defects will be remedied in the new scheme for national superannuation which will come before the House in the autumn; and, being a scheme for earnings-related contributions and benefits, it will bring more generous pensions and the financing will be far more equitable than the present basically flat-rate scheme.
Its aim eventually will be to provide pensions high enough to live on without other means and to get away from a situation in which nearly one-third of all

retirement pensioners are dependent to some degree on supplementary benefits. But the target date for the introduction of the new scheme is April, 1972, and, therefore, we have to operate an outdated and inadequate scheme until then. We were determined to use such limited room for manoeuvre as exists and decided to adjust the present scheme as far as we could to meet the needs of our people in the interregnum; but we make no pretence that what we can achieve in the Bill is wholly adequate. The problems we have had to face this year have proved, if further proof were needed, the necessity and, indeed, the urgency of introducing a totally new system of national superannuation.
The main problem has been to raise contributions not only to cover the higher level of benefits, but to set the National Insurance Fund in balance again. The noble Lord the Member for Hertford (Lord Balniel) was very free last week with his allegations of major short term miscalculations. He should be well aware—and if he is not his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), having directed these affairs over a number of years will be able to tell him—that the whole difficulty is that the scale of the National Insurance Fund is so vast that quite minor variations from the forecasts can have very impressive results.
A variation of only 1 per cent. in income and outgo, which in normal forecasting would be thought a negligible variation, can make a difference of about £50 million in the financing of the fund. The factors which have led to our having to pay out more in benefits than has been raised by contributions and from the Exchequer grant are of very great social significance and we ought to consider them with some care. The trends that are apparent have considerable relevance to us not only now, but in planning the future social security provision for our nation.
The first factor is the very substantial growth in the number of retired people. Only 12 years ago there were 4¾ million pensioners. Now, the figure is more than 7 million, an increase of 50 per cent.; and the rate of increase is steadily rising. Between 1960 and 1964, there was an increase of about 500,000. Between 1964 and 1968, the increase was nearly


800,000; but the most remarkable increase of all has come in the last two years. Between March, 1967, and the end of 1968, a period of only 21 months, the number of pensioners rose by about half a million, from about 6½ to about 7 million.
It was, of course, anticipated that the pensioner population would increase, and from the beginning of the scheme it was realised that up to the 1980s the number of old people would go on growing much faster than the numbers of working age. There is no mystery about this. It is simply past events working themselves out. The size of the population of working age is at present largely determined by the low birth rates of the 1920s and 1930s, whereas the population of retiring age is made up of the survivors of the very large number of births around the turn of the century, when the birth rate reached a level which has not since been equalled. The proportion of old people to people of working age increased from a fifth in 1948 to a quarter in 1967.
Some provision was made against this in the earlier Acts, and in 1959 a system of quinquennial increases was introduced. These were special increases to be made in both flat-rate and graduated contributions every fifth year, starting in 1965, without any corresponding benefit increase. The object was primarily to meet the demographic changes I have explained and to keep the National Insurance Fund in balance on the pay-as-you-go principle. The amount of extra money which was due to be raised in this way to keep the scheme in balance was large—nearly £100 million, for example, in April, 1970. On top of this there have been some other factors working in the same direction which were not very easy to forecast and which have only recently manifested themselves.
First, during the past few years, as a result of improved health and welfare, people have been living longer on average, than was foreseen. Naturally, this is something we all welcome and of which we have every reason to be proud but it is bound to upset the estimates in relation to the fund. Secondly, people have been retiring earlier. The proportion of men who take their retirement pension at 65 has risen from nearly one-half in 1961 to about two-thirds at the present time.
Again, we must welcome the fact that people feel able to retire early and that

they can afford to do so, because of better social security benefits and better occupational pensions; but it does affect the level of the fund. All these factors are cumulative. The result is that the number of pensioners rose by over 7 per cent. in less than two years between March, 1967, and the end of 1968. This is one very important factor.
Then we come to the question of short-term benefits. The level of unemployment has been slightly higher than was allowed for in 1967. During the year 1968–69 the number of unemployed averaged 2·3 per cent. We have instructed the Government Actuary to base his calculations on about the same level this year, but falling to 2·2 per cent. in 1970–71. Caution is needed particularly because it is now widely recognised that a higher level of unemployment is associated with any given level of economic activity than was the case in the early 1960s.
No one factor is responsible for this, but it is certainly the case that with the introduction by the present Government of the earnings-related supplements, at a time when my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) was the Minister, together with redundancy payments, working people are now in a position to spend longer looking for jobs that suit their talents and their skill than was possible previously. They are no longer forced to take the first job that comes, whether suitable or unsuitable, and we must welcome this fact.
I would like at this juncture to say a few words on the question of fraud, because it is sometimes implied that this leads to quite a large leakage of the funds. The hon. Member for Liverpool, Garston (Mr. Fortescue) has put Questions on that subject from time to time. Allegations have recently been made in the Press and elsewhere about people in the building industry drawing unemployment benefit while working as self-employed sub-contractors. We know than this kind of abuse does go on. Among half a million unemployed there are bound to be some who set out to defraud; but it is important to get the balance right. It would be quite wrong to suppose that fraud is widespread, or to say that we are doing nothing about it.
The particular question of sub-contracting in the building industry and the abuses of many kinds to which it gives rise is, as the House knows, a matter which the Government have under active consideration following the Phelps Brown Report. It is not a new problem for the Department of Employment and Productivity, which administers unemployment benefit on our behalf, and which is seeking to tackle this opening for abuse. It would be impossibly expensive to set up a system of individual surveillance over all unemployed people, the overwhelming majority of whom are genuine and honest.
We have a team of special investigators, but inevitably we must rely to a large extent on evidence obtained when a claimant comes to the exchange, from employers, and especially from the public at large. Those who have positive evidence of abuse should come forward with that information and should not sit mum.
Whenever there is evidence or suspicion of fraud, urgent action is taken to check it. For example, a man may be required to sign on daily. There were over 700 successful prosecutions for unemployment benefit fraud last year compared with about 550 in 1967. I can, therefore, assure the House that increases in the cost of unemployment benefit are not to be ascribed to the lax disbursement of contributors' money.

Mr. Tim Fortescue: Would the hon. Gentleman agree that there is room for tightening the administration at employment exchanges? I know from experience that the clerks are anxious to find suitable posts for applicants for unemployment benefit, and they do a very good job. But, from my experience, they do not come to the conclusion sufficiently early that certain applicants are not genuinely seeking work and therefore should be denied benefit.

Mr. Ennals: I very much doubt whether the clerks should come to that conclusion too early. It would be most unfortunate if they came to an early conclusion about a genuine and honest claimant. But when there is suspicion, there are a number of courses of action which the Department can take, and it is as anxious as we are that abuse—and

there is an element of abuse—should be checked.
I come to the question of claims for sickness benefit. The cost of sickness benefit under this and the previous Conservative Administration has been rising by an average of about 3 per cent. a year if changes in the level of benefits are discounted. Previous assumptions had been that this would probably level off, but it has not happened. In 1967–68, sickness benefit was paid for 308 million days compared with 262 million in 1961–62, 270 million in 1963–64 and 282 million in 1966–67.
I do not say that those figures suggest that the amount increases steadily every year. Inevitably, it depends on whether it was an epidemic year. During the last three years there have been two 'flu epidemics in the winter. But the graph shows an upward rise. In the Department we are carefully studying the significance of this increase. But certain conclusions can already be drawn from the analysis of the statistics.
First, there seems to be no significant change in the proportion of people claiming sickness benefit. In any one year only about one-third of the population at risk—about 21 million—claim sickness benefit, and only about one-third of them claims more than once. Two-thirds do not claim at all.
Secondly, the evidence is that more frequent short spells of sickness tend to be a feature of younger beneficiaries. I will not draw any conclusion as to why that should be so.
Thirdly, longer spells of sickness tend to be a feature of older beneficiaries. It has been possible to do more research in this respect and to analyse it. About half of all the days lost in 1967–68 were attributable to people whose spells of incapacity lasted more than six months.
There has been a gradual growth in the number of long-term sick. There are about 400,000 insured workers who have been sick for more than six months, and of these about 320,000–240,000 men and 80,000 women—have been sick for more than a year. It is right to mention these facts, because many people suppose that the substantial proportion of sickness claims is made by the short-term sick. Recent checks show that three-quarters of the long-term sick were over 50 years of age and that the majority of them


were, on medical advice, unlikely ever to return to work. For the most part, they will remain on sickness benefit until they reach retirement age. Thus, a very small minority of the insured population account for half of all the days lost from sickness.
Statistics relating to the long-term sick show a marked increase in incapacity due to mental illness and to diseases normally associated with old age, such as arteriosclerosis, arthritis and degenerative heart disease. This may well be a reflection of a changing pattern of disease and medical skill in prolonging life. The achievements of medical science which have prolonged life have been responsible not only for a reduction in the mortality rate, but for keeping alive, on sickness benefit, people who would otherwise have died.

Mr. Frank Hooley: Does my hon. Friend's interesting analysis include sickness due to industrial injury as opposed to what one might call ordinary disease?

Mr. Ennals: I have been dealing only with a detailed analysis of sickness benefit claims and not with industrial injuries. I do not think that there is any evidence of a substantial or steady increase. If that is not so, I shall ensure that my right hon. Friend, when winding up the debate, deals with the point.
A fourth factor in explaining the difficulties of the fund is that people who retire earlier or who are sick and unemployed do not pay contributions. Therefore, there is a double effect, Moreover, there was a fall in the working population amounting to about 200,000 between 1966 and 1967, and the downward trend appears to have continued during 1968. Some of the elements in this are to be welcomed, such as the fact that many more young people stay on in full-time education longer than before and come on to the labour market later. We welcome things of this sort, but allowance must be made for the effect on the fund.
I have tried to explain the difficulties fully and frankly. A very substantial sum must be raised, first, to support the current benefits and then to raise them to the new levels—in total about £430 million in a full year. This faced the Government with a dilemma. One possibility would have been to let the Act take its course

and have a quinquennial increase next April when the Act would have required it. But we decided that this would be wrong and that people would prefer, not to take two bites at the cherry, but to face the situation now and absorb the increases due in April, 1970, into the up-rating, as was done in 1965.
If we were to do it all at once, we had to decide how to do it. The traditional way of raising the amount required would have been to put a flat-rate increase equally on employers and employees. But this would have meant a flat-rate increase of about 3s. 4d. a side—too severe a burden for members of the lower-paid population. Moreover, it would have been a move backwards instead of forwards to the new scheme. In our thinking in preparing the Bill, we have had in mind the principles which will be the basis of the legislation to be introduced in the autumn.
Neither would it have been right to put a disproportionate burden on employers in present economic circumstances. Apart from anything else, it would have conflicted with the future development of social security as the Government see it in the new scheme. The same objection would apply to any suggestion of a disproportionate increase in Exchequer support, although clearly there could be no question of adopting a solution which reduced the proportion.
As my right hon. Friend announced last week, the Government decided to restructure the present graduated system so that it became a stepping stone to the new scheme and could bear most of the burden of the increase. The solution is threefold—graduated contributions above £18 to be increased by 2¾ per cent., revaluation of graduated pensions—which I will come to later—and introduction of a special additional Exchequer payment concurrently with the increase of graduated contributions. That is how we have been able to hold the flat-rate increase as low as 1s. for a man—11d. for a woman—for about 6 million workers who are earning less than £18 a week. I believe that the House and the country recognise that this was a wise and fair decision, and I hope that the noble Lord will agree that we were right.
We have asked the more highly paid to pay the largest contribution increase.


The additional 7s. 7d. which a man earning £30 a week will pay represents an additional 1·3 per cent. of his earnings. Some critics have said that this is a heavy impost, but it is exactly the same percentage increase as was imposed in 1961, when hon. Gentlemen opposite had responsibility, upon a man with equivalent earnings by the Conservative Administration when they introduced their graduated scheme. I hope that we shall have no criticisms from them on this score.
Under the contribution structure we propose, a man in participating employment earning £12 a week will pay 8·5 per cent. of his gross earnings as against 8·1 per cent. at present—an increase of 0·4 per cent. A man on £23 a week, the national average, will pay 6·4 per cent. as against 5·6 per cent. at present—an increase of 0·8 per cent.; and a man on £30 a week 5·7 per cent. as against 4·4 per cent., an increase of 1·3 per cent. We are thus asking the man on £30 to pay an additional proportion of his earnings three times as great as that falling upon a man on £12 a week and half as much again as that paid by a man on average earnings.
In using the earnings-related basis as the mainstay of our contributions increases we are deliberately moving towards the principles of the new scheme of national superannuation, which will be wholly earnings-related. The percentage contribution under the new scheme will be 6¾ per cent. for all. Hon. Members will see, therefore, the effect which this will have on both the higher-paid and the lower-paid workers.
It should be made clear that the higher level of contributions will earn higher pension rights for those within and those outside the existing graduated scheme. It is not a higher contribution for nothing: it is a higher contribution which brings a higher pension entitlement. Of course, this is also in line with our new scheme, whereby those who earn more will pay more and, in return, receive more pension. We are convinced that this is the right principle. We made it clear in the White Paper, "National Superannuation and Social Insurance" that we adhere firmly to the contributory principle for national superannuation. I am sure that this is what people prefer—not to receive a pension as "a donation",

to quote the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) when Prime Minister, but to earn their rights to pensions and benefits by their own efforts.
It is quite unrealistic to talk of transferring the cost of retirement pensions from the National Insurance Fund to the Exchequer, as some hon. Gentlemen have done. This would mean the equivalent of an increase of 5s. 3d. on the standard rate of income tax. If pensions were tax-financed, they would almost certainly also be lower than under the contributory basis. I fear that, under a Conservative Chancellor, they would be means-tested. It is part of current Tory philosophy, if that is not too generous a word to describe as much as I can understand of Tory thinking on these questions.
I think that people are more willing to pay for a pension which is specific and theirs by right than they are to pay higher taxes to meet the many and varied types of Government expenditure.
It has been said that what we propose is moving very near a form of income tax. This is a point made in the Motion of the hon. Member for Kensington. South (Sir B. Rhys Williams) in which he seemed to be commenting on the Bill which will be introduced in the autumn, before he has seen it. We will look forward to his next Motion when the Bill is produced. Certainly, this is not moving towards a new form of income tax. Those who are called upon to pay more will earn more benefit, and that is no part of an income tax system. This is the touchstone of a true scheme of social insurance.
The whole point is that, in a contributory scheme, the State, in return for contributions paid during the contributor's working life, undertakes to provide pensions directly related to those contributions when the contributor retires. The alternative of a tax-financed—

Mr. John Pardoe: The hon. Gentleman is pursuing a tortuous argument. He must recognise that there is no relation between the value of the contributions which I or he makes during the course of his lifetime and the payments which he will get from a generous or ungenerous State at some future date when he retires. They are not related in any sense at all.

Mr. Ennals: I should be interested to hear what the right hon. Member for Kingston-upon-Thames had to say when he introduced his graduated scheme, to which about 20 million workers pay in one form or another according to their earnings, so that their contributions affect their benefits. Admittedly, this is only a topping-up of a flat-rate system, and the new scheme in the autumn will, of course, be entirely earnings-related, so that what a man gets will flow from his earnings-related contributions—

Mr. Pardoe: No.

Mr. Ennals: The hon. Gentleman is quite wrong. No one can say that, under the new scheme—

Mr. Speaker: Order. We are debating, not conversing.

Mr. Ennals: I am debating, anyway, Mr. Speaker.
The alternative of a tax-financed scheme leaves the contributor with no assurance that his pension will bear any relationship to the money which he may have paid in by way of tax. Under a tax-financed scheme, his prospects of pension do not have the in-built secure guarantee provided by a contributory scheme. We want to give to every contributor the assurance that, in his retirement, after a lifetime's contributions, he can count on a pension closely related to his contributions before retirement and guaranteed against any fall in value during his retired life.
This, of course, is the essence of the principle, not of this Bill, but of the new scheme which will be introduced in the autumn. These points have been made many times from these benches and they are spelled out in the White Paper.
I want to turn now to the specific provisions of the Bill. The existing basic National Insurance flat rates are £4 10s. for a single person, and £7 6s. for a married couple. Under the Bill, these will be increased, from the week commencing 3rd November, by 10s. and 16s. respectively, to £5 and £8 2s. The objective is to restore to these benefits the value lost because of the rise in prices in the two years since the benefits were last increased in October, 1967.
The values we achieved in 1967 were, I would remind the House, 20 per cent.

above the values for these benefits which we found when we took office in 1964 that is, 4s. in the £ better. This improvement means extra spending power for pensioners, compared with 1964. That is what the Bill and the record of the Government means for pensioners.
I have little doubt that some of my hon. Friends will remind me that the Government have described inflation-proofing as only a minimum objective in their long-term pensions policy. That is quite right. We have made it plain that our long-term objectives include making sure that pensioners and other beneficiaries will continue to share in the nation's rising living standards. But we have also made it plain that any responsible Government must take into account the general economic situation. A sound economy is an indispensable foundation for a worthwhile income for pensioners no less than for the country as a whole.
We cannot at the present time do more, but we are determined to maintain the value of the contributory benefits on which elderly people, in particular, rely so much. This is an obligation we owe to those with incomes a little above supplementary benefit levels as well as to those who are assisted by our supplementary benefit scheme.
With proposals for pensions about 20 per cent. better in real terms than those which we found when we took office, I need no further answer to the noble Lord who, a week ago, when my right hon. Friend made his statement, was disposed to criticise the proposals as inadequate. I should like to know from him tonight whether a Government made up of his right hon. and hon. Friends would give a higher pension than is contained in the Bill. If so, how much higher, and how would they finance it? The House is entitled to know what their proposals would be if, unhappily, they had responsibility.
Or would they, as I suspect, put pensions on a means-tested basis, thus destroying the insurance principle? Up to now, there has been a deathly hush from the Conservative benches about their policy on these questions. It is not just the House that is anxious to know their thinking. Even the country might wish to know what their policies are. The chance will shortly come when the noble Lord speaks.
These increases in the flat-rate national insurance benefits will affect about 7 million retirement pensioners, about 530,000 widows, including 140,000 widowed mothers. About 40,000 widows who at any one time are receiving the 26 week widow's allowance will benefit from the increase of 13s. in that allowance. About 1 million people will be receiving the increased flat-rate sickness benefit, and unemployment benefit is paid to roughly 300,000 beneficiaries. In all, about 9¾ million people will benefit from increases in national insurance benefits and about 320,000 from increases in industrial injuries benefits, coming to a total of well over 10 million people.
It is figures like these, together with the earnings-related supplement for those who are sick or unemployed, which led my right hon. Friend to say last week that we were getting better value for money than ever before. I was surprised to see that the Daily Telegraph, in publishing the Gallup Poll on Saturday, implied that my right hon. Friend was talking only of pensions. They headlined the story:
Majority Say Present Pensions Poor Value".
The results of the poll, for anyone who read beneath the headline, showed that very large majorities said that they had good value for money in maternity benefits, in sickness benefit, in unemployment benefit, and in the National Health Service. The Daily Telegraph seemed to assume that the weekly insurance stamp does not extend to the whole range of social security benefits. The results in the newspaper were a very full justification of my right hon. Friend's statement.
I turn now to the industrial injuries scheme. I want to remind the House that the Bill increases disablement pension from £7 12s. to £8 8s. for an assessment of 100 per cent. Injury benefit, which is payable with the earnings-related supplement, is to be increased by 10s., from £7 5s. to £7 15s. This preserves the differential advantage of this benefit over national insurance sickness benefit at £2 15s. As the House knows, increases are also proposed for other industrial injury benefits.
As a background to the improvements in national insurance benefits proposed in the Bill, we must also keep in mind

the great improvements which the Government have made in provision for the most vulnerable members of the community through the supplementary benefits scheme, for which the country owes a debt of gratitude to my right hon. Friend. We shall, of course, be discussing these in detail in the debate on the draft Supplementary Benefit Regulations, which have been laid today. The new rates will provide an increase of between 23 per cent. and 24 per cent. in real purchasing power since 1964, even excluding the 10s. long-term addition introduced in 1966.
The new increases are a second instalment, additional to the increases which have been in payment since last October. The two sets of increases, taken together, will mean that the single householder and married couple will have had increases in their income of at least 10s. and 16s. respectively since October, 1967—that is, the same total increase as in the standard rates of national insurance benefits.
I hope that this will help some hon. Members to explain why, in the ordinary case of single householders, the fact that they will get 10s. increase in retirement pension or other national insurance benefits will mean that they will need 5s. less supplementary benefit to give them the 5s. extra income above 1968 rates and at least 10s. extra above the 1967 rates.
There are two other benefit changes which the House will wish to note. First, the Bill proposes a further relaxation in the earnings rule for retirement pensions by raising from £6 10s. to £7 10s. the level of earnings beyond which the earnings of a retirement pensioner during the five years after minimum pension age begin to reduce pension entitlement. Under these proposals, taking a married man as an example, the combined pensions of the pensioner and his wife, plus earnings which do not affect his pension, could amount to £15 12s.
This increase in the level at which the rule begins to operate is justified by the movements in average earnings since the rule was last changed, taken together with the benefit increases we now propose. It is proposed that the change should come into operation in November, with the benefit increases.
Secondly, we are providing for an extension of cover for death grant in respect


of handicapped people who have never themselves been able to work and contribute to insurance. The Bill provides that when a handicapped person dies death grant may be payable on the insurance of a close relative with whom he or she was residing. I know that, though the numbers affected are small, the absence of cover has often caused much distress and concern to responsible parents and other relations.
I am sure that hon. Members on both sides will welcome this proposal. In the White Paper we recognised the need to remedy this gap in the existing provisions, and I am glad that we have been able to take this early opportunity to put it right.

Mr. Alec Jones: Can my hon. Friend give an assurance that this cover will apply to the handicapped who not only reside with others in the way he described, but who are living in, for example, homes and hospitals?

Mr. Ennals: I will look into the matter. Certainly, these provisions cover those who are the responsibility of insured persons. The question of defining where the person concerned lives is one which I will look into carefully, since I would rather not answer my hon. Friend off the cuff.
The topics I have mentioned cover the principal benefit changes proposed in the Bill. I will do no more at this stage than to note two other provisions. First, as explained in the Memorandum to the Bill, the opportunity is being taken, both by amending Schedule 4 of the Industrial Injuries Act and by paving the way for further regulations, to clarify certain obscurities relating to the assessment of disablement which have been the subject of criticism by the National Insurance Commissioner and the Court of Appeal. Secondly, the Bill provides powers to make regulations which will be needed for the transition to decimal currency on 15th February, 1971.
I have dealt with the main provisions of the Bill. I will comment briefly on a major decision which my right hon. Friend the Secretary of State announced last week. He said that all pensions earned under the present graduated scheme—including the new pension rights

earned by the higher contributions provided for in this Bill—will, after the new scheme has been introduced, be revalued every two years to protect them from erosion through rising prices. This is the same sort of inflation-proofing which will be applied to all pensions—flat rate and new scheme pensions—under the new scheme.
This will mean a better deal for 20 million workers who have been contributing to the graduated pensions scheme introduced by the right hon. Member for Kingston-upon-Thames. The 1961 scheme—we have said this many times—was a swindle. [Laughter.] The right hon. Member for Kingston-upon-Thames laughs, but he knows that what I am saying is correct.

Mr. John Boyd-Carpenter: The hon. Gentleman must not draw that inference. It is possible that I was drawing the inference that it was a pleasure to have him as a major associate of mine.

Mr. Ennals: We in the Government have been desperately attempting to make a respectable woman of the right hon. Gentleman's scheme. It has been a difficult job and we have been able to go only part of the way towards succeeding. We have not been able to ensure that the modest pensions which the contributions under his scheme earned are protected against rising prices because part of the swindle of the right hon. Gentleman was not just the size of the pension that was earned but the fact that it shrivelled year by year.
Every year since the right hon. Gentleman introduced the scheme there have been rising costs and, therefore, every year the pension earned under the scheme with the graduated contributions that have been paid has been shrivelling and has gone on shrivelling until the moment of retirement of those people who thought that they would get a decent pension but who found, because of rising prices, that it had been reduced.

Mr. Boyd-Carpenter: Is the hon. Gentleman aware that his right hon. Friend described the 1959 Act as a swindle not on those grounds, but on the ground that a major part of the graduated contribution was used to pay current flat-rate benefits? Is not that precisely what this Bill is designed to do?

Mr. Ennals: There were several reasons.

Mr. Boyd-Carpenter: Really!

Mr. Ennals: I assure the right hon. Gentleman, if he is suggesting that there was only one reason why his scheme was a swindle, that there were several. If he wishes, we can list others.
At any rate, we have been able to remove one element of the swindle, but it would have been difficult for us, in equity, to have decided to raise the contributions, as we have under the graduated scheme, without ensuring that those who were paying a higher graduated contribution would get a fair deal for their money. This is the principle that lies behind the decision that the Government have taken. As a result of the Government's decision, all graduated pensions earned between 1961 and 1972 will be subject to the biennial review so that the value of these pensions will keep abreast of changing money values.
We are, therefore, providing some protection from 1972 against what I believe were the inequities in the scheme which the right hon. Gentleman introduced in 1961. As my right hon. Friend said last week, this decision will lead to some problems for those who have contracted out of the State's graduated scheme, but there is a good deal of time for consultation and adjustment, since this change will not be completed until after 1972. This decision should be warmly accepted, along with the Bill, as a further step towards the new scheme outlined in Cmnd. 3883.

7.25 p.m.

Lord Balniel: I should begin by thanking the Minister, on behalf of the House, for the careful explanation which he has given of the Bill, an explanation made on behalf of the Secretary of State for Social Services, who apparently leads his men like the Duke of Plazo Toro, from behind. We have noted that the right hon. Gentleman has flitted in and out of the House. We hope that he will take part because we always enjoy his contributions to our debates on the social services.
The Minister will probably agree that there are certain additional arguments which can be adduced about the Bill and which perhaps throw a rather different

light than that which he has thrown on some parts of the Measure. There are, of course, two main sections of the Bill; that part which increases benefits and that part which increases contributions. In debating this subject, I fear that one is forced to use a number of statistics. I therefore apologise in advance for my speech containing a number of figures.
Before saying anything further, I wish to make it clear that I agree that an increase in the basic pension to restore it to its previous purchasing power is very necessary indeed. The rise in the cost of living since the last pension increase—the present pension having been fixed in October, 1967—has been more rapid than at any time since the period of the last Labour Government in 1951.
In debating this Measure we are, for the first time since the astonishing incident in the Budget—when increased benefits were announced but no statement was made about how much they would cost or how they would be paid for—debating the increased benefits in the knowledge of who will pay and how much the exercise will cost—or at least we know how much it will cost for the next two years.
What a long way we have come in these last two months. What a vast escalation there has been in the cost of the scheme. What deception by the Chancellor and what confusion by the Secretary of State. The right hon. Gentleman wants to make his mark in history. He will. There is a Beaufort scale for wind force. They are now establishing a Cross-man scale for chaos. It was a happy interlude of complete farce while it lasted. The first Bill was ready and we were told that it would be laid before the House. Then it was rejected by the Cabinet. This interlude of farce could not have gone on for ever, and now we have the first opportunity of examining the Government's proposals.
The Burget imposed an extra burden of no less than £340 million a year, and the Chancellor tried to sweeten his Budget speech by saying that pensions and benefits would be going up. He refused to tell us who would pay. Indeed, he did not even tell us the total cost. Instead, we were told that the arrangements about who would pay for the increased benefits had not yet been worked out. He would only say that about £250


million would be needed to pay for the benefits, plus what he described as a "substantial extra provision" to get the National Insurance Fund out of the red.
We had to put down a Motion condemning the Government, and only because of our Motion was it revealed that the cost would be £430 million. Of this £70 million would have to be found from general taxation and the remaining £360 million would be found from extra contributions. The total tax and contribution burden which is being imposed this year over and above the figures of last year, taking the Budget and this Bill together, is no less than £770 million. The burden on contributions, the largest ever increase, will be reflected in wage demands. The burden on industry, which will be reflected in prices, will be very heavy indeed. As the C.B.I. said the other day:
The additional imposition substantially exceeds the total tax increases already announced in the Budget.
The Minister of State has explained how the payments are to be spread. His proposals have to be looked at against the background of what has happened to the contributions since the present Government came into office. On 28th January, 1963, speaking of the flat-rate contribution, the right hon. Gentleman said;
Each time the Government put one shilling on that tax"—
he was referring to the poll tax—
they make the burden more intolerable."—[OFFICIAL REPORT, 28th January, 1963; Vol. 670, c. 657.]
I have a certain sympathy with the general viewpoint that the right hon. Gentleman expressed. The flat-rate contribution particularly affects the lower paid. In 1964, when the Conservatives left office, the flat-rate contribution was 11s. 8d. a week for an employed man. Today it is 16s. 8d. In November the Secretary of State will increase it by 1s., and it will be 17s. 8d. So by November this year the flat-rate contribution will have increased by 6s., an increase of well over 50 per cent. The right hon. Gentleman said that the burden of the flat-rate on the lower-paid worker is very substantial. It is right that the House should at least know that the flat-rate contribution when we left office was

3·2 per cent. of average earnings. The right hon. Gentleman is increasing it to 3·7 per cent. of average earnings in November this year.
Take the man earning £30 a week who will pay the maximum extra contribution of 7s. 7d. in November. In 1964 he paid 19s. 4d. Today he pays 26s. 5d., and next November he will have to pay 34s. a week. So between 1964 and November this year he will have had an increase of no less than 14s. 8d. a week, an increase of well over 70 per cent., in his weekly contributions. These extra contributions are very heavy burdens on employees, but the extra cost on industry is even heavier. It is this which will be directly reflected in prices.
I give the example of the impact of the flat-rate stamp because I believe that is telling enough. In 1964 on the flat-rate stamp in respect of each employed man the employer's share was 9s. 8d. After taking into account the Budget increases in selective employment tax which start next month, employers will pay a total of 64s. 11d. for each employed man. In November that goes up to 65s. 11d. So between 1964 and November this year the employer's share of the flat-rate stamp, including S.E.T. and redundancy payments, will have gone up by no less than 51s. 3d., an increase of 620 per cent. from 9s. 8d. to 65s. 11d.
The increase in the employer's share of the stamp for a man earning £30 a week, or more, will be even greater. I notice that in the tables in the White Paper, Command 4076, the figures exclude S.E.T. and redundancy payments in an attempt to make the picture look rather less harsh, but I think it right to include them because they are part of the burden on employers arising directly in respect of their employees.

Mr. Ennals: Would not the noble Lord have thought it confusing if we produced S.E.T. figures which bore no relationship to the contributions paid for benefits? We are talking about national insurance, not taxation.

Lord Balniel: I thank the hon. Gentleman for his very patronising intervention. I have explained why I think it right, when considering the burden imposed on the employer and on industry which is directly reflected in costs, to


take into account all these other burdens such as S.E.T. and the redundancy fund.
The sadness is that these increased contributions called for by this Bill will not secure any real advance in the living standards of old people. They are merely necessary to retrieve the purchasing power of the pension, which is falling very fast indeed. The scale of the rescue operation which is needed, and which the right hon. Gentleman has embarked on, can be seen in the figures I shall give of price rises in recent years. In 1966 prices rose by 3·7 per cent.; that is 9d. in the pound. In 1967 they rose by 2·6 per cent.; that is 6d. in the pound. Last year they rose by 6·2 per cent.; that is 1s. 3d. in the pound. There is no sign at all from all the indications I have seen that this rapid rise in prices is falling off. Indeed, every indication is that the rapid rise in prices is accelerating.
The Retail Price Index has now risen for 19 consecutive months. This is the longest continuous price increase since the war. The last Budget, with its S.E.T. increases, with its purchase tax increases, with petrol tax increases and increased contributions under this Bill, will give a further twist to the price spiral. To cope with this very serious situation the right hon. Gentleman has introduced the Bill. The £4 10s. pension is to be increased by 10s. next November with similar increases for other benefits. Since it was fixed, in October, 1967, the pension has lost purchasing power to the extent of 9s. What is to happen between now and November is anyone's guess. We shall have to wait and see, but it is not unreasonable to expect that the whole of this increase will have been wiped out even before it starts.
The increase in contributions is designed solely to restore the purchasing power of the pension. It is the price that the country is having to pay for the Government's inflationary policies.

Mr. Peter Archer: I am trying to understand the hon. Gentleman's argument. I agree that one antidote to inflation is to reduce social service benefits and contributions, but is that what he is suggesting? If not, what is his solution, and where does his argument lie?

Lord Balniel: It lies in the totally different philosophy of the two parties. We believe that the continuous and colossal increases in direct taxation are one of the major contributory causes of inflation. We do not, for instance, believe that devaluation was a desirable thing to achieve in our economy. The right hon. Gentleman describes it as being a giant stride towards Socialism. There is a difference of view between us. We believe that uncontrolled expansion of public expenditure, combined with colossal increases in taxation, is one of the major causes of inflation, and it is this more than anything else which is eroding the value of the pension.
I disagree with the Government's general economic policies. I disagree with the policies which have forced prices up so fast. I disagree with the increases in direct taxation. I disagree with the almost uncontrolled expansion of public expenditure. I disagree with the policies of inflation which have cut the value of the pension and necessitated the Bill. I even disagree with some of the social priorities which the right hon. Gentleman has selected in this social service field.
However, within the context of the position in which the Secretary of State now finds himself, and within the framework of inflation which should never have been created, I have some sympathy with some part of the financing arrangements of the Bill. The Minister was trapped. Should he throw a greater proportion of the burden on the taxpayer? Rightly, he rejected this, although with a qualification which I shall come to. Should he throw a greater proportion of the burden on the employer and on industry? Rightly, in the present circumstances, he rejected this. Should he throw a greater proportion on the flat-rate stamp? Rightly, he rejected this.
Instead, the Secretary of State took the graduated contribution of the scheme of my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and vastly extended it. He has taken the graduated contribution on earnings between £18 and £30—½ per cent. of earnings—and blown it up to 3¼ per cent. Unlike the Boyd-Carpenter scheme, if I may properly refer to it as such, the Secretary of State refuses to allow contracting out. Yet it is this feature which is so crucially important


to the expansion of the genuinely savingscreating private occupational schemes.
Having taken this decision, what a profound embarrassment it was for the Secretary of State, because it was he who led the chorus and stumped around from platform to platform bellowing about a "Tory swindle". No one did more than the Secretary of State for Social Services to orchestrate the opposition to this scheme. Now we understand what terrible anguish the right hon. Gentleman must have been in for the past two months as he thrashed around to escape from the predicament into which he had got himself. We can imagine the scene; "How can I fool them? Heavens, how can I fool them?" he cried out.

The Secretary of State for Social Services (Mr. Richard Crossman): Fool whom?

Lord Balniel: The British public. So the right hon. Gentleman comes up with a plausible little slogan, a meretricious little scheme. He says, "I will inflation-proof the Boyd-Carpenter pension for those who are still contracted in". My right hon. Friend could have done that.

Mr. Crossman: All the pension "bricks" are included in our proposed inflation-proofing, for those contracted out as well as those contracted in, because everyone, whether they are in or out, can earn pension from the graduated scheme. It is not only those contracted out who have pension rights through the scheme.

Lord Balniel: The right hon. Gentleman is inflation-proofing the Boyd-Carpenter pension in so far as it applies to those who are not contracted out. My right hon. Friend could have done this.

Mr. Crossman: Why did he not?

Lord Balniel: I will explain why. It must be very tempting to draw in money in return for a promissory note and leave it to one's successor to pay the cheque. It even sounds quite good. It removes the firm mathematical integrity of my right hon. Friend's scheme and puts a flexible politician's promise in its place. My right hon. Friend could have done it, but he did not. I have not even asked him why he did not, because I know. It is meretricious. It is false. It is bogus.

It is the political arithmetic which I believe that Britain completely distrusts.
Also, the right hon. Gentleman is developing a scheme to draw in additional taxpayers' money to pay out to persons who, by very definition, are not in the greatest of need, at a time when he is doing nothing for the over-80s, nothing for the civilian disabled, nothing to eliminate the problem of child poverty. The lust for political popularity has overcome what I would regard as being a more proper selection of social priority.
Let the House be in no doubt. This is a last-minute expedient to save the embarrassment of the right hon. Gentleman. Of course it is a last-minute expedient. In paragraphs 20 and 62 of his own White Paper, which was published as recently as January of this year, the Secretary of State specifically rejected this inflation-proofing. Paragraph 20 says:
It would not be right to provide higher graduated pensions only to those who have not been contracted out.
These are very technical matters, and we shall follow them up in Committee. But the principle is clear. An employer was given a clear option on certain clearly defined terms. If the Minister now proposes retrospectively to alter these terms to the detriment of the employees who have contracted out, he is doing something which harms the interests of private occupational schemes and the employees who have contracted out. He has decided retrospectively, at the taxpayers' expense, to provide a subsidy to those in the State scheme at the expense of those who have contracted out.
We should note these warning words of the Government Actuary as set out in paragraph 5:
It is proposed, however, to provide for further Exchequer payments of £10 million in 1969–70 and £45 million in each later year in addition to the normal supplements to the flat-rate contributions. These additional sums will be sufficient to maintain the Exchequer proportion of the total income scheme at about its present level over the next two or three years.
It is a very short-term forecast indeed which the Government Actuary makes.
The Government must decide whether they want to continue the growth of genuine savings through occupational schemes or whether they do not. If they want to encourage occupational schemes,


and if they deny equality of treatment to those contracted out of the present graduated scheme, they are raising real doubts whether any of the terms for abatement under their 1972 scheme will be worth the paper on which it is written. This is not a very good start to the 1972 scheme. Indeed, if one takes the Secretary of State at his word and assumes that those who are contracted out will be denied equality of treatment, then these words in the Economist of 14th June are very relevant:
This is not only grossly unfair on those who contracted out of the Boyd-Carpenter scheme under the original and honest prospectus (which Mr. Crossman is pleased to call a 'Tory swindle'). It is an open invitation to employers in future not to proceed with the expansion of private occupational schemes, but to move over to the non-savings-generating state hand-out scheme instead. The Treasury would then have to raise enormous sums by new taxation.
No responsible Opposition could accept this retrospective breaking of a contract as binding upon themselves.
There are many other parts of the Bill—sickness benefit, unemployment benefit, industrial injuries—to which I can more conveniently return in Committee. I hope that by then we shall have the paper on short-term benefits promised for the spring. Even the most chronic pessimist would agree that we have arrived at high summer by now. I am particularly anxious to debate short-term benefits because I am convinced that there could be a wise and compassionate reassessment of social priorities here.
Many of us find it difficult to accept that help for the civilian disabled should be given such a low priority. We also question whether some of the benefits are not being abused. We question the illogicality of some of the taxation arrangements. I will not debate this now but will return to the main theme of my speech on the Bill.
It is necessary to restore the purchasing power of the pension. None of us can stand by and watch the standards of life of retired people fall steadily in the face of the worst inflation since 1951. If as a country we will a standard of life for our elderly people we must be prepared to pay for it. My doubts lie in the fact that there is almost total incomprehension on the Government benches of

the importance of generating real savings through the private occupational pension schemes. Only if we now encourage private schemes with their genuine savings shall we secure a decent standard of life for future generations of old people. It is very easy and no doubt popular, if anyone is still gullible enough to believe the Government, to talk freely about inflation-proofing pensions. They are empty words, a mere expression of hope that our children will bale us out of the economic mismanagement of our affairs.
It is such an improvident approach. Let us instead concentrate the resources of the State on those who cannot help themselves—the elderly, the disabled, the mentally ill, the chronic sick and all those categories of people who are desperately in need of our help. The younger generation are able to stand on their own feet; let us encourage them to do so. Let us encourage them to make provision for themselves and their families through the media of saving and investment, and, in particular, encourage them to provide for their old age through private occupational pensions.

7.53 p.m.

Mr. Kenneth Marks: Like the noble Lord the Member for Hertford (Lord Balniel), I want to congratulate the Minister of State on his analysis of the problems and the way in which the Bill will tackle some of them, building as it is on the present inadequate system. His ability to make the situation clear was only matched by the noble Lord's ability to confuse the issues as much as possible. The purpose of the Bill is to enable an increase in retirement pensions to take place and to find the means of providing money for this.
It is significant that the noble Lord did not reply to my hon. Friend's question whether he would keep the same kind of pension or whether he would alter it, whether he would adopt this system of graduated contributions or some other course. The purpose of the increase, according to the White Paper, is to restore to flat-rate retirement pensions and other insurance benefits the value lost because of the rise in prices since the last increase in 1967. The proposed increase does that, but only just.
Since we cannot use the October, 1967, to October, 1969, figures, as they are not


yet available, I suppose that the figures taken into account were those from April, 1967, when the proposals for the October, 1967, increase were considered, and April 1969. During this period of two years the index of retail prices went up by 10·2 per cent. The pension will go up by 10·9 per cent. for couples and 11·1 per cent. for single persons. I accept that the arrangements under the Bill are temporary. They amend the 1961 scheme which is inadequate and we must wait for the new scheme to do its job properly.
It will be noted that some hon. Members opposite did not wish to increase pensions since they decline to give a Second Reading to the Bill. Are they suggesting that the kind of proposals they envisage could be worked out in time to give pensioners an increase this Autumn?
To return to the amount of the pension, the Government are right to restore to the pension the value lost by price increases. Is this enough? During the period when prices went up by 10·2 per cent. and pensions are to go up by 11 per cent. approximately, the average earnings went up by 16½ per cent. Ought not the pension to be tied to earnings rather than prices? Why should not pensioners share, as they have done in some of the previous pension rises since 1964, in the improving standard of life?
To be fair to the workers who have had these rises it must be said that these are gross earnings. National insurance contributions, income tax, family allowances all have to be considered. There should be some work done to find out the relationship between prices net incomes and pensions.
I turn to a matter about which there is a great deal of confusion. We will have the usual problem in November when pensioners on supplementary benefit find that they are not 10s. better off but only 5s., since they had a 5s. rise last year when there was no increase in the standard pension rate. There is so much confusion and misrepresentation on this that we should get the record straight.
From May, 1963, under the Conservative Government, until this Government came in, there were no improvements either in national assistance rates or retirement pension rates. The national

assistance pension then stood at £3 3s. 6d. and the retirement pension at £3 7s. 6d. In March, 1965, the Government increased both pensions by 12s. 6d. making national assistance £3 16s. and retirement pension £4. In November, 1966, those pensioners on national assistance started to receive supplementary pensions, most of them had an increase of 16s. to £4 10s. That year there was no increase in the standard rate of pension.
In October, 1967, supplementary pensions were raised by 5s. to £4 15s. and standard pensions by 10s. to £4 10s. In October, 1968, supplementary pensions went up by 6s. to £5 1s. and the standard pension was not increased. Under the Bill, the supplementary pension will be raised, from 1969, by 5s. to £5 6s. and the standard pension by 10s. to £5. Since the Government came in those on supplementary benefits have had an increase every year and now receive 70 per cent. more than they did in 1964.
This is considerably greater than any price rises in that period. That standard rate pensioners have had a rise every two years and now receive 49 per cent. more than they did in 1964. This ought to be explained to the old people, concerned about supplementary benefits and pensions. The Press, radio and television should help with this explanation now and at the time of the pension increase.

Mr. Ennals: The House will be grateful to my hon. Friend for giving us this record. Would he recognise that there is also the 10s. long-term addition to which he has not referred, but which was introduced in 1966?

Mr. Marks: I have included the longterm addition in my figure. Having pointed out the need for the explanation of this anomaly, it is time that the anomaly was done away with. The annual review which supplementary benefits receive ought to be applied to all benefits, whether sickness, retirement or any other benefit. The anomaly would be removed and it would be fair to all concerned if an annual review took place.
I know it may be said that it is administratively impossible, but I do not believe that. If supplementary benefits can be adjusted every year then so can other benefits. It may be argued that in some cases the rise will be very small.


What may seem a very small rise in Whitehall is a very important rise to people receiving benefits of this kind. I urge the Minister to consider this urgently, not only in this Bill but in the coming Bill for the 1972 scheme.

8.0 p.m.

Mr. John Boyd-Carpenter: The Minister of State moved the Second Reading in a speech whose clarity has been very rightly commended, and also with a lack of enthusiasm for the Bill whose manifest quality is also very much to his credit. I want to discuss mainly the curious devices which the Bill proposes about the collection of contributions. However, before doing so I want to make a brief comment on the benefit side.
It is completely misleading to say what will be the percentage increase in real terms of the benefits when they come into force in November. Nobody knows. All we do know is that there is no indication in the economy of a slowing-down in the increasing level of prices. It does not lie with the Minister of State or any of us to say that when these increases are paid they will represent any particular percentage increase in real terms over previous levels.
None the less, all of us obviously welcome an increase. In an age of inflation and strong trade unions it is inevitable that the older generation on fixed incomes should find their position being eroded. There is not an hon. Member in the House who does not know, in his constituency, and from his personal acquaintances, of innumerable cases of people who thought when they retired that they would enjoy a comfortable standard of life and have seen the whole fixed income support of their life being eroded. Any sensible and sensitive person welcomes an attempt to do something to restore the balance between the working generation, which though it has not done all that well during the last year or two, did very well before that, and the retired generation, which we all know has suffered considerably and is suffering.
Therefore, I very much welcome the decision to increase benefits generally. I have reservations even about some of these. I fully share the disappointment of my noble Friend the Member for Hert-

ford (Lord Balniel) that the Government have not taken this opportunity to deal with the weakest point in the present system, the treatment of what the Department in that bleak phraseology calls the longterm sick—the disabled, the people, perhaps young, perhaps middle-aged, who will never work again. Even if they are entitled to it, which many are not, the standard rate of sickness benefit may be adequate for a short period of sickness, but, plainly, it is inadequate for a life time.
I find it increasingly difficult to reconcile the differential in treatment between those who suffered a disability in industry at work and those who perhaps suffered it on the way to work. The distinctions become very narrow in the light of some of the decided cases. One gets the cover of the Industrial Injuries Act if one is injured while on the way to work in one's employer's transport. If one uses one's own transport to go over the same route to the same place, one does not get any of the cover in the event of an accident.
While I always uphold the doctrines of complete priority for war pensions, since those hurt in the service of their country in war are entitled to special treatment, in civil life the very sharp distinction between the man injured at work and the man injured outside work and the lack of any proper disability or constant attendance provision for the latter are very serious.
It is not a very serious issue financially. The Minister of State gave figures for the long-term sick of about 80,000. I think that there are substantially more than that, but in any event the number is not very large, and the amounts concerned are not very large. It is a great pity that the Government, who are making some changes in the benefit side of the scheme in the Bill, have not dealt with this matter.

Mr. Ennals: To set the record straight, the figure of 80,000 is simply that of women. The total figure is much larger, at 320,000, of those who have been sick for more than a year. I do not disagree with the right hon. Gentleman, but I want to put the record straight.

Mr. Boyd-Carpenter: My guess is that the hon. Gentleman's 320,000 includes


some who are not in this permanent disability group and that there are quite a number who have a long illness, but who will return to work, and that it excludes some because they are not entitled to sickness benefit. I judge that it is a few hundred thousand. I want to register my great disappointment that the Government have decided to do nothing about this matter.
The other point was touched on by the hon. Member for Manchester, Gorton (Mr. Marks). Next November, those of the retirement pensioners who most need it will get the smallest increase. I know the argument. It is said that they got their sapplemenary pension increase a little time ago, that this is now made up and that they will now be in the same position as the others. But it will be difficult to explain to them that, whereas the better off pensioner gets 10s. in November, the poorest: of all get 5s.
There is a remarkable change in this respect in the attitude of the Secretary of State. I see that he has now flitted out of the Chamber again. On 28th January, 1958, he wrote an article in the Daily Mirror. That was his excellent habit in those days, because it provided his political opponents with unlimited supplies of gratuitous ammunition. He made a reference not to the 1959 Act, but to the 1957 Act, then about to come into operation, and he used again what appears to be a Wykehamist expression, the word "swindle". Writing of the 1957 Act, he said:
I called it a swindle—first, because it deprived the smoker of a quarter of his 10s. increase"—
that was the abolition of the tobacco vouchers, which no one has ever shown the slightest intention of restoring—
and, secondly, because it made sure that those receiving National Assistance, whose need is greatest, get the smallest increase of all.
That was the right hon. Gentleman in 1958 who, in 1969, is doing precisely that.
Let me come now to the contributions. The House should be clear, first, what it is that the right hon. Gentleman is doing about the contributions. As my noble Friend said, the whole exercise has been botched. It was an outrage that the Chancellor of the Exchequer should announce the increased benefits in his

Budget speech and for hon. Members to be unable for two months to elicit any information about the way in which it was proposed to raise the money. It was a cheap exercise in electioneering which reflected seriously on the integrity of the Chancellor and on the weakness of the Secretary of State for allowing him to do any such thing.
It was also wrong because it made it impossible, in the absence of this information, to judge the increase of S.E.T. with the fact that, in the case of certain men, the national insurance contribution paid by the employer through the same stamp would go up by 7s. 7d. The House was asked to judge these two transactions separately, and that comes very near to misleading the House on a serious financial matter. It is of some significance, if one adds these up, that in the case of some employers they will have to find about £4 a week before they begin paying a penny in wages to the men whom they employ. The effect on the costs of industry at a time when we are all exhorted to be highly competitive plainly must be disastrous. They are all costs which we know will be passed on as the Secretary of State told us in an earlier debate, in higher prices, in less competitive British industry and in a more inflationary economy.
I feel a certain amount of amusement at the right hon. Gentleman's change of thought about what he used to call "the Tory swindle". I very much admired the Minister of State's gallant diversionary effort. He suggested that the scheme which came into force in 1961 had been called a swindle because of the simple fact that, when a Government are hell-bent on inflation, all contracts expressed in terms of money are liable to be eroded. That is a fairly simple proposition. However, at that time we did not have a 'Government hell-bent on inflation, and that was not the gravamen of the right hon. Gentleman's charge.
The right hon. Gentleman's charge was simple, and it was supported in innumerable Parliamentary Questions. He said that it was a swindle to take money under a graduated scheme, contributions to which would be used to pay flat-rate benefits, when it was not intended to pay any substantial graduated pensions for


years to come. That was the essence of the charge which the right hon. Gentleman up and down the country and tediously in the House repeated again and again. But that is precisely what the right hon. Gentleman and the Minister of State are seeking to do with this Bill.
It is made the more amusing when one recalls the election manifesto, "Time for Decision"—that itself has a touch of irony at the moment—which right hon. and hon. Gentlemen opposite put out at the last election. It says, on page 15:
We shall within the lifetime of the next Parliament prepare and bring forward a genuine earnings-related, contributory pension scheme to replace the present Tory swindle.
If they had said what they really intended to do, it would have read:
We propose to operate the present Tory swindle for three and a half years and then greatly to increase its scope and draw in far more money under it.
That is what they have done, and it is an interesting indication of their complete lack of sincerity in the charges which the right hon. Gentleman put forward.
Let us be clear what the Government are doing. They are taking £261 million extra next year and a little more the year after out of graduated contributions, and that is £261 million of the additional £348 million. In return, they are giving an extra liability under the 1959 Act for pensions under its properly devised formula. So far, that is not unreasonable. But, on top of it, they are what they call "inflation-proofing" it. They are not providing a penny by way of provision for that inflation-proofing. They are giving simply a paper promise, a liability imposed upon subsequent generations in return for contributions which they now take. It is that which makes the whole scheme financially disreputable.
My noble Friend said that the Government Actuary has reported only on the next three years. Perhaps we can be told why he has reported only for a period of three years—a period during which practically none of the additional graduated pension liabilities now being increased will mature. Was the Government Actuary told to confine his report to the next three years, or did he find himself unable to give any reliable report for any longer period in respect of a scheme of this sort? I would like a

plain answer to that. Was the restriction of the Government Actuary's report to three years a result of his own initiative or the result of a direction given him by the Government?
The inflation-proofing of the basic flat-rate pension is simply a dramatisation of what has happened since the beginning of the scheme. Under the Conservatives, from 1951 to 1964, there was an increase in real terms of the main body of the benefits of 50 per cent. In respect of certain benefits, it was 100 per cent. That represents a great deal more than mere inflation-proofing, and the Bill is an indication that that is also the policy of this Government.
The inflation-proofing of the basic provisions is no more than window dressing. It becomes a more dubious proposition when one gets beyond the basic flat-rate pension into pensions related to higher earnings. The effect is that the more that a man earns in life and the bigger pension he has earned, the bigger subsidy he will get by way of inflation-proofing from his fellow countrymen when he retires.
To him that hath shall be given
appears to be the doctrine of the Government rather than the old Socialist tag, "To each according to his needs." This is a commitment which is completely open-ended financially. If we get another Government who pursue inflationary policies, the figures involved are quite unlimited and not a penny is being put by to cover that wholly unlimited liability. That really is profligate finance.
For the same reason, it seems quite wrong to bring in the Exchequer contribution into the graduated part of the present scheme. The essence of that scheme was that it paid for itself and that the Exchequer did not contribute. Now we have an addition in the first year of £45 million out of national taxation by way of subsidy to those who ex hypothesi, are at the better end of the earnings scale. That cannot be right at a time when the public expenditure situation is such that the Government have gone back on all their principles; for example, in respect of health service charges, to claw back £3 million on an issue on which the Prime Minister once had the courage to resign. Again, that £45 million is being put in by way of


Exchequer contribution into a scheme which was designed to do without it.
What will be the effect on occupational schemes? One of the proclaimed purposes and, if I may be allowed to say so, one of the successes of the 1959 Act scheme was to stimulate the provision of private schemes. Private schemes have three great merits. They represent real savings at a time when real savings are imperatively demanded by our economic situation. They are tailored to the needs of particular workers in particular trades, and they make for a common loyalty of feeling between all levels and all ranks in great industries. They have flourished and grown.
Lest there be any misunderstanding, I should declare that I do not have an interest here. The House may know that I am chairman of an insurance company, but that company does not deal in these matters.
I am sure that great damage will be done by these proposals to private occupational schemes. There will be no complete contracting-out. There will be partial contracting-out or none. Everyone will be either partly in the scheme or wholly in the scheme, but no one will be wholly contracted-out. The Minister of State cannot say that at present no one is contracted-out. About 4 or 5 million are contracted-out of pensions under the graduated scheme and contribute only to the totally different system of graduated sickness and unemployment benefits. In future, they will all be in this scheme. I doubt whether many firms will think it worth the trouble administratively to run their own schemes and to undertake the work of operating the Government graduated scheme.
The introduction of inflation-proofing and a Government subsidy alters the whole basis on which a decision to contract out was taken. If firms continue to contract-out and run their own schemes, may not they get into serious trouble with their workers who may now look upon the state scheme as much more attractive? If they cancel their contracting-out certificate, may not many of them also decide to go no further with their occupational schemes? There is certainly no incentive now to any employer either to start a new scheme or to expand an existing one.
During the debate on the White Paper I ventured to warn those who were then negotiating with the right hon. Gentleman about contracting-out that those who supped with him would do well to equip themselves with a long spoon. The Minister of State somewhat resented that remark, but the subsequent actions by the Government, which, whatever else their effect may be, are and must be calculated to damage the private schemes, are a vivid confirmation of what I said then. Administrative complications immediately occur. There will be additional cost and contributions on both sides, and the inflation-proofing and Exchequer subsidy alter the whole basis.
What is to happen to the Civil Service pension scheme? As the House knows, the Civil Service excellent non-contributory scheme is contracted-out—that shows the good sense of those who manage it. But what will happen now that civil servants are to be brought partly within the State scheme and are to earn graduated pensions? Will the Minister tell us whether part of the non-contributory pension of civil servants, which is part of their terms of service, is liable to be abated in those circumstances?
If this is not so it may well happen that, taken together, the two pensions of a civil servant will exceed the retiring salary, which is a situation which no sensible administrator wants to see. Because a non-contributory pension is an essential condition of service of the Civil Service, I warn the Government that they will be in for serious trouble if they tamper with it.
As I hope I have made clear, I regard the methods by which these welcome increases in benefit are being financed as dangerous and unsound. One can see how it all happened. One can see that the right hon. Gentleman the Secretary of State, once given responsibility, realised that the 1959 Act scheme was sound, fair and sensible, and that it offered the only effective way of increasing benefits without imposing an excessive burden by way of contribution on the lower-paid worker.
The right hon. Gentleman came to that conclusion, but his attack on the 1961 Act made him a hostage to fortune. He did not dare to come to the Box—nor has he yet dared—and announce that he was simply taking up the Tory


swindle. He hoped to gild it over with the gold leaf of dynamism or inflation-proofing. By so doing he has not only put the occupational schemes in difficulty, but has taken for his successors a considerable liability.
The pitiful and dangerous expedients to which the Government have been driven make me wish to repeat the suggestion, which I made in the debate on the White Paper on National Superannuation, that 25 years having elapsed since Beveridge reported, the scheme having run into real financial difficulties—and I beg the Minister to recognise that I understand the real difficulties faced by him and his colleagues—this is surely the time for another probing and full review into the whole scheme and its finances.
I do not mean that he should not go forward now with the increases; he must do so; but I suggest that, having got the scheme into this appalling mess, he should realise the necessity of having a thorough review. There are able men who are available to serve on that review, some of them former servants of the Department like Sir John Walley, who have enormous knowledge of this subject and could help. Why will not the Government, 25 years after Beveridge, in totally different circumstances, having seen when they recently considered the problem of the contributions and benefits what a mess the scheme was in, decide to have such a review?
I want to see these benefits in operation and I hope that the Bill will receive a Second Reading, but, in return, I hope that the Government will undertake to go as speedily as possible for a full-scale review and that, during the passage of the Bill, they will be prepared to look reasonably and helpfully at Amendments designed to make the contribution structure a little less crazy.

8.28 p.m.

Mr. Peter Archer: Throughout this debate I have been haunted by a feeling that I have been here before. I hope that it will not be thought disrespectful to any hon. or right hon. Member who has spoken earlier if I say that most of the questions raised tonight were fully ventilated in a similar debate two months ago. I am sure that the right hon. Member for

Kingston-upon-Thames (Mr. Boyd-Carpenter) will recollect the point he raised this evening as to whether the Chancellor of the Exchequer was right to include the announcement of the increases in his Budget, or whether any purpose would have been served had he kept the retirement pensioners in suspense as to their fate in the Autumn until all the questions of cost and contributions had been worked out. All this was discussed at considerable length two months ago.
On that occasion I ventured to express to the House certain views as to the merits of the way in which the Chancellor had treated the matter, and as to the way in which it was now proposed to pay for the increases. I am not so enamoured of my own speeches that I believe in repeating them. When I came into the Chamber tonight it was not my intention to intervene. I was led to seek to intervene largely in consequence of certain remarks made by the hon. Member for Hertford (Lord Balniel) from the benches opposite.
The noble Lord discussed at some length the effects of inflation. Of course, I agree with him, as no doubt we all do, that if it were possible to control inflation it would be better than making use of any inflation proofing. But this is crying for the moon. It is something which has not been achieved under either a Conservative or a Labour Government. It does not ring true to suggest that inflation is a phenomenon only of the last two or three years.
The habit of looking through the pages of The Grocer so as to compare recent increases is not a practice which has been invented by right hon. or hon. Gentlemen opposite. I did it, not unsuccessfully, in 1964. The fact is that inflation is a fact of life; and there is no mystery as to the financing of the inflation proofing. Inflation is a sign of increased national prosperity, and it is from that increase that one would expect to finance the inflation-proofing.
I agree with my hon. Friend the Member for Manchester, Gorton (Mr. Marks) that, if I have any criticism of the scheme, I would like to have seen that index tied not to price increases but to wage increases. The least we can do for our retirement pensioners is to enable them,


not merely to stay in the same place but to share in the national prosperity. However, that is a criticism which may well be rectified at a later stage. I am not suggesting that at this stage the Bill should be seriously opposed because of that factor.
Having listened very carefully to the arguments of the noble Lord, who unhappily is not in his place, about the effect of S.E.T. and the other burdens which he alleges are imposed upon industry, I wondered what was the relevance of all this to the Bill. I became increasingly sure that what he was proposing to say was that one antidote to inflation was to reduce contributions. It is true that increased contributions are inflationary, but presumably the relevance to this argument is that if one wants to avoid inflation one reduces the contributions.
I began to wonder whether this was seriously what the noble Lord was proposing. He was not suggesting any other method of paying for the increased benefits. Then at last it came. It came a little by a side wind, but what the noble Lord was saying was that he did not want the increased benefits. [HON. MEMBERS: "No."] Right hon. and hon. Gentlemen opposite say "No", but the words the noble Lord used were that in many cases these were benefits for people who did not need them.

Sir Brandon Rhys Williams: Graduated.

Mr. Archer: Graduated benefits, of course; the very benefits about which we are talking. I will willingly give way if I am being more than usually stupid.

Mr. Marcus Worsley: I would not accuse the hon. Member as ungraciously as that. The point is that these are flat-rate increases in relation to benefit, graduated in relation to contribution.

Mr. Archer: Of course I am sorry, but I still do not understand. Perhaps I have mistaken the argument of the noble Lord. What the noble Lord was suggesting was that many of these increases were going to people who did not need them. Those were his very words. Presumably the suggestion was that in many cases these increases would not have taken place—

Sir B. Rhys Williams: I believe I can explain the dilemma in which the hon. Member finds himself. I have with me a reply to a Written Question to the Secretary of State for Social Services which I received shortly before the debate. The Bill increases flat-rate benefits and also introduces graduated contributions which will earn graduated benefits in due course. The benefits will rise in due course to £25 million a year, which will be given to the people with the least need.

Mr. Archer: If the argument of the noble Lord was directed specifically to the "bricks" which will be earned in the future for the purpose of the graduated benefits, then even then, as I understand his argument, it is open to the objection which I was about to urge against it. But if this is basically what is between us, if what is being suggested is that the graduated contributions which produce graduated benefits are undesirable because those who during their working lives have earned the most will be the people who will benefit the most, this is a matter which we have debated at considerable length on many previous occasions.
The argument in favour of graduated contributions is that it is hard that in old age there should be a considerable fall in income and, therefore, it is intended to cushion those with even relatively high earnings against that fall in income by ensuring that they have relatively high pensions. I am sure that hon. Gentlemen opposite are not unaware of the arguments used in that debate.
I understood the hon. Member for Hertford to say that we should not be called upon to pay contributions for benefits which in many cases go to people who do not need them. If he was accepting the flat-rate benefits, I confess that basically what I wanted to direct against him has considerably less force. But, as I understood it, that was not his point. The noble Lord's general point was that increased contributions are inflationary and that the way to avoid increased contributions is to ensure that we do not have increased benefits. Therefore, we must direct increased benefits only against those who are shown to need them. I understood that that was meant by the words used by the noble Lord when he said that there was a basic dispute


between the Opposition and this side of the House on political philosophy. There certainly is that dispute, which I hope, from this side at least, will never be closed.
What is really being suggested is that social security benefits are basically for people who can be shown to need them. They are for the poor. They really ought to be given only on some kind of means test, whether applied during a person's working life to ascertain contributions, or at the end of his life to ascertain whether some kind of supplementary benefit should be given. On any showing, it is the philosophy of the means test, and certainly that is a fundamental difference between the two sides of this House.
I have never understood how hon. Gentlemen opposite can happily advocate a scheme so basically opposed to the philosophy of incentives. There can be no greater disincentive to working hard and saving hard during the whole of a man's working life than to be told that at the end of it his income will depend on some form of means test. I have never understood how hon. Gentlemen opposite, who are so concerned about incentives when directed to high salary earners and to rising young executives, can be so indifferent to them at the other end of the social scale.
If we want increased benefits, of course they must be paid for. If we do not, we should say so quite frankly. If we want them, there can be no objection to a method of financing them which turns on the ability to pay, upon earnings-related contributions. The objection to the scheme introduced by the right hon. Member for Kingston-upon-Thames, and the reason why it was called a swindle, was not because earnings-related contributions were levied to pay flat-rate benefits but because the flat-rate benefits were existing flat-rate benefits, not increased benefits. They were designed to close an existing gap which should have been closed by the Exchequer.
Since no one else has done so, I should like to congratulate my hon. Friend's Ministry on the compassion which has been shown in the Bill for a number of people whose needs previously were concealed by the smallness of their numbers. I refer to the many

pensioners who were able and willing to augment their earnings, although possibly by only a few hours a day, and whose income was limited by the earnings rule. Incidentally, I entirely agree with the right hon. Gentleman that something might have been done for the long-term sick. I hope that my hon. Friend's Department will keep this problem very much in mind, even though there may have been good reasons why it could not be done in the Bill.
I congratulate my hon. Friend, too, on doing something for the families of the handicapped who, to all their other worries, have the added financial worry of wondering how they will meet the liabilities on death. I recently had occasion to send to my hon. Friend's Department one of the most pathetic letters that I have ever received. One paragraph of that letter read:
… No insurance company will do business with mentally handicapped people as they are supposed to be a bad risk. Please tell us how an ordinary working man is supposed to give a mentally handicapped adult a decent burial or even bury one at all when there is no coverage for death, at least none that we can find. Some of us are worrying what will happen when our child dies, as most of us are unable to save for this, as our husbands are just ordinary factory workers. My own son is 23 years of age, 6 ft. tall and nearly 14 stone in weight, so you will see it takes me all my time to feed and clothe him.
There will be perhaps not a large number of families but still a substantial number who will have good reason to congratulate my hon. Friend's Department on some at least of the provisions of the Bill, and hon. Members on this side of the House will not complain when, to assist people in that position, an additional contribution is levied.

8.41 p.m.

Sir Brandon Rhys Williams: I believe that the amiable, highly intelligent, and probing nature of our debate is entirely appropriate to a discussion of the system of national insurance, which arises from the fundamental desire of people living in a civilised community such as ours to extend charity by means of the State to all members of our society, and I hope that national insurance can eventually become a subject in which there is no party acrimony or partisan dispute.
I regret, however, that this preliminary canter, which is how I suppose we might describe this Bill, for the great new Measure which we understand is to be introduced in the autumn should show virtually all the faults which were detected in the White Paper. It shows that the Government have learned nothing from the suggestions made about the way in which they might improve their thinking on this subject.
I am sure that all hon. Members on this side of the House welcome the increase for national insurance beneficiaries. I think that we all welcome, too, the small relaxation of the earnings rule. This is, indeed, a great blessing for some pensioners. We regret the partial nature of the increase for those who are obliged to seek supplementary benefits. I should have welcomed their being kept in line with those for the beneficiaries of national insurance generally, and that they should not have been obliged to take only half-pay on this occasion. I understand the arguments, but I think it is indicative of the tangle into which the Government have got themselves that they are seeking, as I have said, and I shall have to say many times again, to give the greatest benefits to those with the least need, and then find themselves short of money to help those who have the greatest need.
It is easy to spend money on national benefits of all kinds. What is difficult, and what should concern us, and I think does concern most of us tonight, is how to discriminate in the way we spend the money, and how to find the money that we intend to spend. These really are the philosophical questions at the back of the whole problem of the Welfare State, and I think that this Second Reading debate is an appropriate occasion for going as deeply as we may into this subject.
The trouble with discussing a subject of this nature in a virtually empty House is not that the whole country is not enormously interested, because national insurance will affect every man, woman and child; and it is not that: right hon. and hon. Members are not interested in the subject. It is that in the course of time they have learned that the technicalities are such that it is impossible to make a serious contribution without either being misunderstood or else talking at in-

ordinate length. I think that this dilemma affects us all.
Mr. Speaker in his wisdom did not call the reasoned Amendment which I and a group of my right hon. and hon. Friends set down. I fully understand his reasons, and do not challenge them in any way, but I should like to read the Amendment, because it condenses into as few words as possible what needs to be said about the Bill. The Amendment reads:
That this House declines to give a Second Reading to a Bill which seeks to reform National Insurance without reference to other systems for the re-distribution of income, in particular the income tax; which therefore would add still more to the burden of taxation on individuals and industry without resolving any of the basic problems impeding the effective functioning of National Insurance; which would discourage the creation of wealth by laying heavy extra impositions upon marginal earnings; which requires an increase of £45 million a year in the Exchequer subsidy to the National Insurance Fund and thereby places a further burden indirectly on to taxpayers; and which fails to concentrate help on those now living in the most acute need, particularly the disabled and the children in families with low incomes, but on the contrary would require the Exchequer to contribute to a scheme under which the highest benefits become payable selectively to those who have enjoyed the highest earnings and are not in need.
I feel that I owe it to critics of that Motion to explain the reasoning which has gone into it, so far as it is considerate to take up the time of the House in doing so. My feeling is that we need a totally new approach to the whole problem of redistribution of income in our society. The total expenditure on the social services and housing has reached £8,700 million a year. I suppose it is now infinitely the largest individual item of expenditure in the Government's Budget.
Let us look at the money-raising systems we employ. There are the national insurance flat-rate contribution, the national insurance graduated contribution, income tax, surtax and rates; and let there not be forgotten the quite considerable item, the loss of benefit through the operation of the various means tests. Those, in effect, are all money-raising systems. Then there are the distributive systems: the national insurance fiat-rate benefits, national insurance graduated benefits, supplementary benefits, family allowances, food subsidies, housing, education, health and, of course, the


enormous system of income tax allowances, what I have described as the forgotten Welfare State which in some ways is perhaps the costliest Welfare State we operate. I would like to revert to that.
My thought is that we shall never be able to reform any single one of those separately. If we are to make sense of the redistribution of income in Britain we must look at the entire picture and concentrate on what we are trying to achieve and on the obsolete—in some cases, totally obsolete—ways in which we are seeking to do it at the moment. This is partly a philosophical exercise, for we must ask ourselves what we aim to achieve; and it is partly a business-efficiency exercise in which we must ask ourselves what is the way to achieve it.
I want to improve the redistributive system so that we do, in fact, solve the problem of the disabled. We must solve the problem of children in low income families. Incidentally, no one has mentioned the wage stop. This is one of the crying examples of the failure of our present systems to deal with precisely those problems that are recognised by the public to be the most acute. We must deal with the problem of single pensioners who have even more serious needs than pensioners still able to live together and, to some extent, to meet each other's needs. Widows come high on any list drawn up by any member of the public as having priority for reform; and, of course, the chronic sick.
One could dispute as to who one would put on such a list and how one would draw up one's priorities; but I do not believe anybody would consider that State benefits should flow first and foremost to those who have enjoyed the highest incomes during their working lives and who are in no need. The Government have got themselves into a corner over this for reasons into which time forbids me to go but which are associated with quite ulterior motives connected with policy some ten or 15 years ago in which they hoped totally to nationalise the capital market and get their hands on securities which would give them the power to achieve the back-stairs nationalisation of scores of great companies. But it is false thinking in this day and age to pursue the idea of grant-

ing graduated benefits in the way the Government are doing.

Mr. Ennals: Is the hon. Gentleman applying his criticism to the scheme introduced by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) or to the scheme introduced by the Bill?

Sir B. Rhys Williams: The difference between the scheme introduced by the right hon. Member for Kingston-upon-Thames and the scheme sought to be introduced by the Bill is that the former is arithmetically watertight—[interruption.] It may be a hard scheme which takes no note of changes in the value of money and which gives very small, if any, interest at compound interest rates, but it is arithmetically predictable and absolutely honest. The system which the Government seek to introduce is completely unpredictable. No one can say what rates of benefit he may hope to get in five or ten years. How can anybody contract out of that?
Gradually the Government will find—and whether they still have this express intention or not is immaterial—that they have taken over the private sector. There will be no contracting out because no one can face the commitment of contracting out of a system in which they cannot predict their obligations if they do. The Government will say, "There is a national economic emergency which makes it impossible for us to do all the things that we want to do in national insurance". But it is national inefficiency, not the economic emergency, which is preventing us from achieving the desired result.
I wish to say briefly where I believe we should get the money to pay for increased benefits. As proposed by the Government, the extra money is to be raised by an increase in marginal rates of taxation. It does not need even A-level economics to know that this is likely to reduce the incentive to create wealth. It is highly undesirable to raise the deductions by the State from people's marginal increases in earnings. But that is what is being done.
Let us consider the enormous world of income tax allowances which has grown up steadily since William Pitt. What should income tax produce? Let


us do some elementary sums. I suppose that income tax should be levied on income from employment, self-employment, profits and other types of income. Taking a stab at a round figure, the total sum liable for income tax is about £30,000 million. Even if we assume that the standard rate which we use is the reduced rate of 6s. 5d. instead of 8s. 3d., income tax could be expected to bring in about £9,000 million at least. But it brings in only £4,350 million—or it did when the taxable income was about £30,000 million.
Where have all the millions gone? They have disappeared in the enormous and over-generous negative allowances which the old income tax system still provides. The income tax system has concealed within itself a secret Welfare State which benefits only the better off. It is as if it was a Welfare State like a roller blind which comes only part of the way down the window. The cost can be measured at £4,000 or £5,000 million. One may argue about the figure, but if we are looking for more money to pay for the redistribution of income and to carry out the public's wishes, those who seek will find it there.
In dealing with the paying-out side of national insurance and the Welfare State, we must recognise that there are two systems involved. The State is catering for two quite separate systems. If the Government are in a muddle, it is because they have confused them. One of them arises from the instinct of self-help—that is, the accumulation of capital, particularly for retirement. To cater for this, consciously or unconsciously the State has evolved a system for helping people to protect their savings. The Post Office has such a system. There is Government intervention in various fields, for instance, in the regulations governing occupational pension schemes whereby it is recognised that the Government have a public duty to protect people's savings. There is also the absolutely separate system, which has nothing to do with self-help but is concerned with the opposite, with charity, and that is the redistribution of income. In the one case, people put something aside for themselves, and in the other they put it aside for other people. If we once lose sight of the essential distinction between these two systems, we shall

achieve nothing in the way of philosophical or business efficiency reform.
If the Government are concerned with the problem of promoting savings and helping people to look after themselves in retirement and preventing a sudden drop in income on retirement, they must be concerned with ways of protecting personal assets, particularly in the context of inflation. But if they are concerned with the problems of the standard of living of the destitute and people without resources, the Government must consider the problems arising from the cost of living of such people. I will give two brief examples of why it is vital to keep the two systems—welfare and saving—apart.
First, suppose there was a rise in the cost of living of 10s. a week, or £26 a year. For someone with an income of £520, that would be a rise of 5 per cent., but for someone on £2,600, the increase would be only 1 per cent. Under a universal scheme, how do we possibly cope with a 5 per cent. increase for one person and a 1 per cent. increase for another? The only way is to give each an increase of 10s. a week—the actual amount of the rise in the cost of living. In fact, we must deal with it by flat-rate improvements and not graduated ones. There is no scope for graduation when dealing with problems of redistribution to help the standard of living of particular categories of people.
My second example is this. Suppose the cost of living remained stationary for a time—this may seem farcical, but it might one day remain stationary or even decline—and at the same time, there was a steady increase in capital values. This also is possible. Those contracted into a Government scheme would be stuck, but those contracted out would enjoy bonuses all the time—or their employers would. Where is the justice of that? If one is to apply increases to the State sector where there is no change in the cost of living, one must do it according to the rate of interest, which goes on without relevance to the cost of living.
The first consequence of the Government's confusion over these two systems, welfare and savings, is that they are including this £45 million in their budget. In announcing his plans, the Secretary of State was extremely secretive and this information only came to light in response


to a Question—even those who heard it might have missed the implications of this £45 million increase. The Government have decided, of course, that the Exchequer subsidy must be forced up somehow. They are not prepared to rest on the 18 per cent. of the flat-rate contributions which has existed up to now. They will insist on 18 per cent. of all contributions, including the graduated ones. No one has ever been able to explain, since the time of Lloyd George, what the Exchequer was doing in the national insurance system. It is even more difficult to explain what the Exchequer will be doing subsidising a graduated system.
An explanation which occurs to one is that they are looking for a subsidy which they can, in due course, use to beat the private sector with when they enter into competition with it. If the Government scheme can draw on a subsidy starting at £45 million and rising with the passage of time, no private sector scheme can hope to compete in the long run. This endorses what I am saying.
Coming back to my exegesis, there are three methods by which the State can pay out money to individuals. The first is on the basis of selectivity. This has been advocated by many people and is the best system in a transitional phase, when resources are genuinely extremely tight. But its disadvantages have been stated frequently, and they are final and convincing. There are the disincentive effects, the humiliating effect of the operation of the means test, the administrative cost and many other things. A general system of selective benefits introduced as a final solution to the problems of national insurance will get us nowhere.
Second, there is universality, whereby everyone is treated exactly the same. This is the system with which the Government should be concerned. I do not like to feel that the Government make favourites of any class of people according to their resources. In the eyes of the law and, I think, of the State, every citizen should be equal. I do not say that children, pensioners, widows, the disabled and the blind should all have precisely the same amount from the State; but in each of those categories everyone should receive the same, whatever his resources, because the State, in its paying-out activities,

should know nothing of people's resources. I do not say that income tax should not do something to correct anomalies. Income tax is the means test to end all means tests. There should be no other.
The third method of paying out money is, of course, graduation. I find it surprising and shocking that the Government should have adopted graduation as their system. The Government have no place in operating graduated benefits. I know that this plain statement will be held up against me, and I will not try to develop this theme at the length which it deserves, but I should like to say something about the place at which the graduated system comes in.
It arises not from a man's relationship with the State but from his relationship with his work. In our relationships with our employers, it is obvious that in what we are able to earn—the same applies if we are self-employed—we are not all equal. If, therefore, we are to have a system of benefits graduated according to earnings, to income or anything else that arises out of the creation of wealth, the State should play no part in it. Graduated benefits should arise by virtue of a man's relationship primarily with his employer.
If we are dealing with graduated entitlements arising from employment and if we are particularly concerned, as we are tonight, with the question of pensions, the Government's only rôle should be to ensure that proper provision is made for retirement as a condition of employment. In other words, we reverse the rôle by which one either belongs to the State scheme or is occasionally able to contract out. To put it another way, we say that every employer should look after the pensions of his work people. Only those who cannot should contract in.
Good employers already do this, and the Government should ensure that good employers are not put at a disadvantage vis-à-vis employers who do not recognise this liability. Every employer should put some cash into his employee's hand at the end of each week and some cash into the hands of trustees for that employee's retirement. After all, this is only acknowledging that most of us live longer than we are able to work.
The Government would do well to look at the whole basis of occupational schemes and recognise that there is an obligaticn on employers to provide for the retirement of their workpeople. If employers do not wish to have private occupational schemes—there will be many who either cannot do so or are not prepared to do so—the State should establish a Post Office scheme or public pension fund trustee to provide a vehicle for peoples' savings arising from employment; and, of course, graduated according to their income.
Such an arm's length scheme, so to speak, should be a place where contributions fructify in the way that capital should fructify, which has nothing to do with the cost of living. Nor does it even have anything to do with the growth of the gross national product. Dynamise the bricks by all means, but not in relation to the cost of living or to need. It should be done remembering that those bricks are slices of capital, and capital should be treated as capital and not as units in the redistribution of income. Until the Government meditate a little longer on this concept and recognise the truth of it, they will never produce a workmanlike and arithmetically sound recommendation.
How should the Government approach universal benefits arising for everybody in the community by virtue of citizenship? We hear a lot, particularly in the American Press, about N.I.T.—negative income tax—and R.A.Y.N.—the "receive as you need" systems. I do not think that the Government are giving serious study to these concepts. They are normally left to amateurs and back benchers.
The one I particularly favour is P.P.T.C.—personal positive tax credits. All these things should be the subject of Government interest, but, unfortunately, when one seeks to interest the Government in them, one is told that such matters must wait until after, for example, the Finance Bill is out of the way.
The object of these benefits should be to provide what the late Sir Winston Churchill saw in his vision of the Welfare State: a floor through which nobody could fall in any circumstances but above which all would be free to rise as high

as they liked. I consider that a basic structure of social security through which nobody can fall should be part of our society. It should be paid on a flat-rate basis which should be cost of living related, universal, flexible and paid for out of taxation.
There will be those who do not cotton on to this idea at once, but they should never forget the great value of an ancient slogan which dates back further than Marx and is probably older than Christianity:
From each according to his capacity; to each according to his need.

9.7 p.m.

Mr. Frank Hooley: I will concentate on the question of the structure of the problem that faces us tonight and with which the Government are partially dealing in the Bill.
I wish, first, to pay tribute to my right hon. Friend and his Department for the lucidity of the White Paper. The facts are expressed clearly, and the introductory paragraphs on pages 3 and 4 set out extremely well the fundamental problem which the Government—any Government—face in providing pensions and other social security benefits and matching them in some way to the resources which are available from contributions or taxation.
The analysis of the change of structure in terms of the number of beneficiaries and people available to meet the load—to pay for the claims of the beneficiaries—is interesting and more carefully prepared than paragraphs 10 and 11, which deal, in a rather offhanded way, with the problem of finding the money.
The analysis of dealing with the problem of the balance between the working population and the non-working population—that is, the beneficiaries in terms of sickness, unemployment and retirement—is interesting and shows the seriousness of the problem. It demonstrates it in terms of the growth in numbers of pensioners. This is a phenomenon with which we are familiar. It is serious and is becoming increasingly serious for the reasons set out in those paragraphs; because people are retiring earlier and are living longer as a result of medical discoveries. For all these reasons the growth in the number of pensioners will pose a


considerable problem in terms of financing the scheme. The sickness claims certainly are an uncovenanted phenomenon. I suppose we do not know whether this represents something that will go on for the next decade or so or something that is a passing phase. There certainly seems to have been some rather odd fluctuations between a fall of minus 2 per cent. in one year and an increase of plus 7 per cent. in the subsequent year, but generally the trend seems higher and it could go on.
Then there are the important aspects in paragraph 8 of the White Paper in respect of the fall in the number of the working population and, another phenomenon which very few have referred to, the effect of young people staying on longer in full-time education, which reduces the work force and will continue to do so. The structural problem as between the effective contributors and the number of beneficiaries is reasonably well dealt with and very cogently and clearly dealt with in the opening paragraphs of the White Paper, but if we look at the problem of contributions and finding the actual cash to meet all these claims, we see that it is virtually dismissed in a couple of very short paragraphs. I find this rather remarkable.
It is certainly true, and I agree with paragraph 10, that to meet this very radical change in structure as between contributors and beneficiaries we have got to the end of the road in terms of the flat-rate principle. At least we have got to the end of the road in the sense that we are prepared to go for another shilling but no more. I would burke at the shilling. In that sense I agree with paragraph 10. We have come to the end of the flat-rate idea because the balance now between the contributing work force and the beneficiaries has got completely out of line with what presumably it has been traditional in the past to regard as a level of benefits which we consider right. Therefore, paragraph 10 is perfectly fair.
In paragraph 11 the Government quite cavalierly and off-handedly, without any kind of reasoning or rationale, dismiss the notion that the whole gamut of taxpayers with a different percentage of contributions should in no way have it altered either up or down. I find this very odd. The Exchequer percentage

according to Table 2 submitted by the Government Actuary is about 15 per cent., or, if we add an item called interest—it is not clear where it derives from—it is about 17 per cent. I have not been able to discover from any source what the rationale is for this figure. As far as I know it is merely a traditional Exchequer contribution which is not related in any way to the demands of beneficiaries, to the general gross national product, the general wealth of the country, or the size of the work force compared with the size of the nonworking population. There is no rationale for this figure. Yet it is simply being preserved within this scheme, and—what is more terrifying—I understand that it is to be preserved in the new scheme as though somehow it was a justifiable figure which had a rational basis.
I suspect that we have got into trouble because the Exchequer contribution has not been varied sufficiently to take into account this very drastic change in structure between the work force and the non-work force, or between the work force and the beneficiary population in terms of social security.
The 7 million people in retirement pay some form of indirect taxation. We have got out of line between contributions related to earnings and contributions related to general taxation. I echo the plea of the hon. Member for Kensington, South (Sir B. Rhys Williams) for a closer consideration of this question in terms of the whole structure of taxation rather than simply in terms of contribution on the insurance principle.
There is no insurance principle here. The present benefits are met as to about 15 per cent. from contributions paid during a working lifetime and as to 85 per cent. from the community at large. So the insurance principle is largely bogus. In 50 to 70 years' time there may be a genuine insurance principle under the new scheme. There will certainly be a much greater relationship between contributions and benefits under the new scheme than there has been, but in the nature of things there cannot be an insurance-based benefit scheme because the span of a working life—40 to 50 years—in relation to the period of retirement covers such varying levels of income and economic activity that there cannot be a direct relationship between


contribution and benefit. This is demonstrated even in such superannuation schemes as university superannuation schemes, where there has been a direct notional link between contributions and eventual benefit. But this principle has broken down and most universities pay supplements to most academic staff.
It is disturbing that the Exchequer element in the equation is blithely taken for granted at 15 per cent. and will be taken for granted in the future, and there is no proper questioning whether this is a reasonable or relevant charge on the national taxation system within the total system of contribution.

Mr. Fortescue: Was it not foreseen in the original Beveridge Report that the Exchequer contribution would rise to 50 per cent. of the total by 1968—that is, 20 years after the introduction of the scheme'? Does not this strengthen the hon. Gentleman's argument?

Mr. Hooley: I did not know that. It strengthens the argument and makes sense. If the structure of the population changes in the way the White Paper describes, that phenomenon must arise. It is regrettable that the Government have not taken this into account.
I am disturbed also about the ceiling of £30 a week for graduated contribution. The sum of £30 a week is roughly £1,500 a year, and average industrial earnings are about £23, something like £1,200 a year. In so far as the graduated contribution is providing any distribution of the loan, it is providing the distribution within the middle range working population in favour of the poorer range working population. It is not asking for any very great contribution from the wealthy working population, because, unlike the income tax principle when someone pays little or nothing in the lower ranges of income but progressively more in the higher ranges, under this system a person pays most in the lower ranges of income and nothing at all once he gets beyond a certain threshold pitched very low—nothing at all, that is, on the extra earnings.
Come £30, a person pays his contribution, and after that he can earn another £100 a week and the liability stays the same. This is the reverse of the very sensible social principle of income tax. I am surprised that the £30 level should

have been pitched so low, and so near to average industrial earnings so that there is only the gap between the £1,200 and £1,500 a year. This is something which will have to be watched when we come to the full scheme which this scheme is approaching, and make sure that there is an adequate contribution from the higher income ranges, and that the level at which the percentage impost stops is not kept too low. My feeling is that one and a half times average industrial earnings is probably too low in real terms and ought to be stepped up.
I very much welcome the proposal about the death grant. I have had this kind of problem in my constituency. The deep sense of bitterness and grievance caused by the present anomaly is to be removed, and I am very glad. I have serious reservations in that while the analysis at the beginning of the White Paper of the structural problem in the population between the work force and beneficiaries, is a good and lucid one, and a very important foundation for future thinking. I do not believe that the analysis in terms of contributions, particularly the ratio between Exchequer contributions, the contributions of the taxpayers as a whole, and the contributions from the working contributors, has been worked out sufficiently. The Government have simply accepted that the Exchequer will not pay any more. What worries me more than this is that my right hon. Friend's more elaborate calculation on the national superannuation scheme may come seriously adrift.

9.25 p.m.

Mr. John Pardoe: I want to refer at the outset to the remarkable speech made by the hon. Member for Kensington, South (Sir B. Rhys Williams) which was a tremendous contribution to new thinking. Both his writings and his speeches are extremely welcome to all of us interested in the welfare state. I may say, with some modesty on my part, and I hope with due respect to him, that I sometimes have the feeling that if only the House would grant myself and the hon. Gentleman leave of absence to form a two-man Royal Commission on the subject, we could solve all the problems.
I will not follow him in all of his arguments, but I will develop one of his themes later. I have spoken earlier


about one of the points he made, particularly about the factor of income tax allowance. I will deal primarily with the problem of pensions, but there are one or two earlier remarks I have to make.
I want to emphasise what has been said by Members on both sides about the problem of the civilian disabled. This is the first debate on social security matters that we have had since the death of that remarkable lady, Megan du Boisson and, as a vice-president of the Disablement Income Group, which she founded, I would like to pay tribute to her work. It will, I am sure, in due course receive its reward. Of course, we shall do it sometime, so why not make a start now? I am convinced that this has a much higher priority than we have been prepared to grant it.
Secondly, I ask the Government to consider the problem of the long-term addition and its relationship to the exceptional circumstances allowance. In observing the workings of the long term addition, which I welcomed when it was first introduced, I am beginning to wonder whether we were not wrong to make this flat-rate long-term addition of 10s. One of the reasons why it was introduced was to allow the officers of the Department more time to devote to investigating thoroughly, and giving additional help to cases of "real exceptional need"—those were the words used at the time. This has not happened in the majority of cases. All too often the long-term addition is being used by officers of the Department as a means of disregarding the real exceptional need of the bad cases.
It is extremely easy to sweep them under the carpet, because we are aware that the 10s. is there. I have very grave doubts about the workings of this and have entered into a considerable correspondence with the Chairman of the Supplementary Benefits Commission about it. Both myself and those who see this long term addition working, contrast the way in which officers of the Government seem determined to claw back a few shillings from a crippled old woman with the way in which they pursue a relatively tolerant attitude to those who maintain

the fiction that they are unemployed when they are not.
My third point has to do with the problem of the Fund. We are at some disadvantage here because the last quinquennial review was up to 31st March, 1964. We have interim reports for the 1967 Act and for the present Act.
The new quinquennial review may well be with us in the autumn. It is due then. The trends apparent in the last review have now been confirmed in two subsequent interim reports by the Government Actuary, and we have heard again from the Minister of State that the increase in sickness absenteeism and the trend towards earlier retirement are major factors in the deficits which have grown in the fund.
The Minister of State gave some interesting figures of the trends in sickness benefit. In the 1950s there was no obvious trend, and that is why it was impossible to see what was likely to happen. Sickness absenteeism went up and down according to major epidemics. Since 1960 there has been a definite upward trend, rising from 274·9 million working days lost in 1960 to 308 million days lost in 1968. The high point was 311 million in 1966, but although we seem to have reached some sort of plateau, there is no guarantee that it will last.
Although the Minister of State gave detailed figures of the breakdown within the overall figures, it would be interesting to know the breakdown in relation to the absenteeism of men and women. The reason why I ask that is that in the last quinquennial review on the fund there was a substantial difference between the average number of weeks of sickness per insured man and per insured married woman, as one would expect. It has occurred to me that one of the factors in the total increase that we have seen in the 1960s in the number of working days lost may be the increased amount of days being worked by married women. I do not know whether that is so, and perhaps we shall get the figures later in the debate.
I have some sympathy with the reasoned Amendment, which has not been called. I agree with many of its points. In previous debates, I have made clear my difference with the Government and their philosophy on pensions. I maintain that the Government are now


in a pension pickle because they have ignored those warnings.
I have just as great differences with the official view of the Conservative Party, which the noble Lord spelt out again at the outset of the debate. I believe that they were woefully led astray by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in the late 1950s, and they have rued that day ever since.
As I see it, the Government defend their approach to the Bill on two grounds. The first is that it is at least a move towards New Scheme. Apparently one has to drop the word "the" in the new syntax. I do not like New Scheme any more than I like the Bill, so I do not find it a convincing argument that the Bill is a step towards it. The second ground on which they defend the Bill is that, after all, they are doing only what the Tories did in a slightly different way. I happen to believe that the Tory scheme was a swindle. The Secretary of State was right to use that phrase, and there has been some argument tonight about the reason why he thought that it was a swindle.
There was a book published by the Labour Party towards the end of the last Conservative Government called, "Twelve Wasted Years"—a hilarious record—in which there is much which could almost have been taken from a recent document circulated to hon. Members by the Institute of Directors, though relating to a rather different Government:
The Tory scheme has four fundamental faults".
The first is:
None of today's pensioners benefit from the new graded scheme.
The second is:
… there is no dynamic principle incorporated in their scheme to relate pensions automatically to rising earnings.
The third is:
The Tory scheme does not even give pensioners protection against rising prices.
The fourth is:
The main objective of the scheme was to increase the share of the cost of pensions paid by the insured employee and decrease the share paid by the Exchequer.
I agree with all four of those criticisms of the Tory scheme. Finally, it was said:

Clearly, the new Tory" 'pension scheme' is really a tax measure, designed to make working people pay more for their pensions in order to relieve the wealthier taxpayer from contributing his proper share towards State pensions.
I am not certain how far the Government have come from that. Looking at their New Scheme, it seems that they intend to have just the same faults. Certainly that last criticism is as true of their scheme as it was of the Conservative scheme.
Where have both the major parties gone wrong? In my view, they have gone wrong in confusing two matters. They have confused the deficits on basic pensions with the gap between those in occupational schemes and those who are not. They are entirely different problems which have to be tackled in separate ways.
The basic pension, treated separately, should be adequate for people to live on, and it must be above whatever we call subsistence level. Then, having dealt with the basic pension, the further provision should be left to private schemes and not involve the Government. That is what I mean by a partnership between private and State provision. It is not what is meant either by the Government or, I regret to say, by the official Opposition Front Bench, though the hon. Member for Kensington, South (Sir B. Rhys Williams) has made it clear that he is prepared to throw that overboard.
The Minister of State asked the noble Lord three questions. Would he give a higher pension and, if so, how much, and how would he pay for it? I would answer those questions in this way. Yes, I would give a higher basic pension. I would try to relate it as a proportion of the average industrial wage, and I should think in terms of paying a married couple's pension at the level of half the average industrial wage for a working man. I do not say that we should go to that tomorrow; it might take five to seven years to get there. At this stage it would be something like £11 10s. a week. Once we had reached that, we should keep it there, and keep the basic level related to that figure.
How would we finance it? We would finance it by a social security tax which would be a percentage on a firm's payroll. This would be an easy tax to


collect, two-thirds paid by the employer and one-third paid by the employee.
What about the disappearance of the contributory principle? I have already in an intervention challenged the Minister of State on the whole issue of the insurance principle and the contributory principle. I do not know whom he is trying to fool. I do not know whom the people who advocate a contributory principle in our insurance scheme are trying to fool. Are they trying to fool the I.M.F. into thinking that so long as it is contributory it is not inflationary and is not evil? Are they trying to delude public opinion into thinking that there is something moral about a person getting what he has paid for? They do not fool me, because there is no correlation between the money that we pay and the pension that we shall get, and there has not been for many years.
There is much glib talk about people wanting to establish a right to a pension. They do not have a right because of the contributions they make; they have a right because we have passed an Act of Parliament which pays them a pension. It has nothing to do with the contributions they pay. How Parliament provides the tax once it has decided to pay the pension has absolutely no effect on the basic right of the individual to draw that pension.
I have said enough on the basic pension and will deal now with what I call the further provision. I have always recognised that if we were to leave the State with the basic pension and rely on private schemes for everything over and above that up to 60 to 80 per cent. of former earnings, which is the level of pension which I would like to see, some sections of industry would be unable to join any occupational scheme. Some might be unwilling; some might even be unable. Therefore, the individual employee working in a firm where there is no contributory pension scheme is under a severe disadvantage because, although he can have a scheme with an insurance company, only his contributions will go in, whereas a person in another firm which has an occupational scheme has the benefit of the firm's contribution to his pension.
I want to put forward what I think is a fairly new idea for solving this

dilemma. It is not entirely original, but it has Liberal origination because it first appeared in the News Chronicle on 16th October, 1958 in an article written by Mr. Desmond Banks, who is now President of the Liberal Party.
An employer without a pension scheme should pay a levy for every employee into a central account. I will come later to what that levy will be. Any employee who wishes to and who works in a firm without an occupational scheme may put up to, say, 5 per cent. of his income into a private scheme run by an insurance company or any of the other private bodies that provide schemes. That is his contribution. But then his contribution should be topped up from the central account by a contribution to the premium, and this might be, say, 3 per cent. of the employee's income. It would mean that, with his 5 per cent. and the 3 per cent. from the central account, he would be paying in something like 8 per cent. to a private insurance scheme.
It is easy to work out the mathematics. If one third of the employees not in occupational schemes decided to do this to the maximum, each employer's levy would be 1 per cent. of each employee's wage. That is what I mean by the level of the employer's levy.
What are the advantages? The first advantage is that it is voluntary for the individual. He does not have to contract out; he can contract in. Second, it separates the basic old age pension and further provision. I hope that I have given my reasons for thinking that desirable and indeed essential.
Thirdly, it is not in the least inflationary and would involve real savings by individuals. Fourth, there is no Government subsidy and absolutely no cost to the taxpayer in administering the central account, unless there was a tax subsidy, and even that would not be necessary.
Fifth, there is no barrier at all in the scheme to the extension of private schemes. I have already said, and indeed I have warned insurance companies on their own ground, that the insurance companies are allowing themselves to play a rather timid mouse to the Government's cat by not opposing the new Government scheme. I believe that once the Government have entered the area of graduated pensions in the way in which they are now doing there is no end to


how far they will advance. If they pursue such a scheme, they will be forced, whatever their political persuasion, to mop up most of the present private sector.
Sixth, there are no actuarial problems for the State because there is no State fund. It is not the responsibility of any State fund.
Seventh, a man without an occupational scheme is put on a level footing with a man who is in an occupational scheme. I believe that this plan could form a working alternative to the Government's proposals. It is even preferable since it overcomes all the disadvantages of the Government's scheme and it has a great many advantages of its own.
It is not too late for the Secretary of State to change his mind. He merely has to ensure that the green edges of his White Paper get more and more green until gradually they cover the whole of the page. He can then quietly dispose of his scheme and write a new one, or, preferably, he could allow me to write it. I hope that he will consider the criticisms which have been made in this debate, not only of the detailed proposals in the Bill but of the more general proposals which he has put forward in White Papers and in speeches, and will realize that there is a need for a different approach to the problem of pensions in this country in the future.

9.44 p.m.

Mr. Alec Jones: I am sure that the hon. Member for Cornwall, North (Mr. Pardoe) will understand if I do not follow too closely his arguments. I share his views about the disabled income group, but tonight it is my intention to concentrate on only one small point in the Bill.
Some of my hon. Friends on this side of the House have been wary of some of the statements made by my right hon. Friend the Secretary of State for Social Services, but tonight I should like to congratulate him and all involved in bringing forward this Bill, which increases benefits to so many people in need. I am particularly grateful to him for the provisions of Clause 4 and the extension of the death grant. This is a somewhat morbid topic, but it has been referred to by several of my hon. Friends.
A number of people in the country, our fellow citizens, through no fault of

their own suffer considerably. They suffer financial hardship, emotional stress, and great unhappiness and distress for long periods. Some of my constituents have suffered from this hardship for 25 years. I refer to those unfortunate families who have relatives—sons and daughters—who are mentally sick and confined for years, sometimes for life, in mental hospitals and institutions.
I have a constituent who, for 25 years, has had a son in such a mental hospital. For 25 years my constituent and his wife have paid weekly visits, involving considerable costs in travel and in providing extras which this very dependent son requires. These costs have been a serious financial burden on my constituents. But they are nothing compared with the emotional strain and anguish under which they have lived for these 25 years.
It is my constituents' dearest wish that their son should die before them and that he should be buried in the family grave, at least uniting this tragic family in death. Without the Bill this could not be, for my constituents—now old age pensioners—after 25 years of these extra expenses, now amounting to 30s. a week, would be unable to pay the costs of such a funeral without the extension of the provisions of the death grant.
The White Paper, in paragraph 86, states:
The death grant will be extended, on the insurance of close relatives, to cover the deaths of handicapped people who were living with them …
I was very disappointed when I saw that in the White Paper, because it would now allow or cater for those tragic families who have mentally sick children living in institutions. Therefore, I wrote to my right hon. Friend, and he replied:
I can assure you that when the necessary legislation is considered, the point which you make will most certainly be in mind.
I have not long been a Member of this House, but I have become a little cynical sometimes about some of these promises. However, I was delighted to see that Clause 4, as I read it and as I hope my right hon. Friend will confirm, not only fulfils the promise in his letter to me, but will enable such tragic people as my constituents to realise what is, after all, a very modest, though heartbreaking desire.
I ask my right hon. Friend, however, to examine the problem of helping these


tragic people not only by extending the cover of the death grant, but throughout the long years when they have to carry these financial and other burdens alone. For example, my constituents do not qualify for rate rebate, because their income is just above the rate rebate level. The rate rebate scheme does not permit the expenses of visiting such dependent children to be taken into account.
I had no other purpose in speaking this evening than to draw to the attention of the House the provisions of the extra coverage of the death grant, and particularly to thank my right hon. Friend for the way that he has introduced it into the Bill. Even if I did not support the other parts of the Bill—which I certainly do—I welcome it for the compassionate provisions of Clause 4.

Mr. Tim Furtescue: I should like to begin by referring to a brief exchange that I had with the Minister of State earlier—I am sorry that he is not here—when he seemed to cast doubt on my views that there is a considerable laxness in employment exchanges in administering unemployment benefit. I still hold that there is. I should have liked to ask the hon. Gentleman, had he been here, why it is that a year ago his right hon. Friend the Member for Lanark (Mrs. Hart), who was then the Minister, found it necessary to introduce into the offices of the Ministry of Social Security a considerable tightening up to prevent unemployment benefit or supplementary benefit, as it is there, being unjustly paid. If that was right, why is it not right to introduce similar measures into the administration of employment benefit at employment exchanges where this money is paid out by the Department of Employment and Productivity on behalf of the Ministry? If the Minister would be kind enough to write to me on that subject, I should be very interested to have his reply.
The House, and indeed the whole country, have been intrigued and concerned at the spectacle of the Secretary of State, caught in the tangled undergrowth of pensions and social insurance, bravely brandishing his flashing non sequiturs, and finally uncovering last January a grandiose structure which our grandfathers would immediately have recognised

as a folly. This evening we have before us the first piece of legislation conceived in the shadow of that folly in which, to quote the right hon. Gentleman, the Government have
thought it right to move towards the new scheme of national superannuation by raising most of the additional contribution on an earnings related basis."—[OFFICIAL REPORT, 10th June, 1969; Vol. 784, c. 1239.]
That being so, it is proper for us to consider and challenge this evening the conventional wisdom on which last January's White Paper and thus the Bill are based.
I first direct the attention of the House to the whole principle of pension benefits being paid only in return for pension contributions, a principle which is enshrined in the Bill. The principle is one which is taken for granted in the White Paper, where wholly unsupported statements are made to demonstrate that it is unchallengeable.
Paragraph 25 of the White Paper says:
It is as true today as when Beveridge wrote his Report that benefit in return for contributions is what the people of Britain desire.… People do not want to be given rights to pensions and benefits; they want to earn them by their contributions.
As a matter of interest, having read that, I turned to the original Beveridge Report, which I have here. That quotation is taken from paragraph 21, the first sentence of which is rather different from the sentence quoted in the White Paper. A few small words have been left out, which make the matter rather different. Beveridge said:
The first view is that benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire.
He stated it as a view, and he went on to say:
This desire is shown both by the established popularity of compulsory insurance,"—
I have never heard that compulsory insurance is particularly popular—
and by the phenomenal growth of voluntary insurance against sickness, against death and for endowment.…
To me it seems that the phenomenal growth of voluntary insurance would be a sign that people were turning away from compulsory insurance, and would not be evidence that compulsory insurance was particularly popular.
Beveridge went on to say:
It is shown in another way by the strength of popular objection to any kind of means test.
I think we can say that today, after 20 years, popular objection to any kind of means test is certainly not as strong as it was when Beveridge wrote his report.
Beveridge then said in that paragraph:
Management of one's income is an essential element of a citizen's freedom.
That, once again, does not seem to point to the necessity for pension contributions paying for pension benefits. If people really want to earn benefits by pension contributions, which is what the White Paper and the right hon. Gentleman say, one would expect them to be up in arms at this moment against the present system, because they do not do so now, and have not done so since the National Insurance Act, 1948.
The other day my hon. and gallant Friend the Member for Lewes (Sir T. Beamish) asked a Question which elicited an answer from the Minister of State. He asked
what proportion of the full flat-rate pension to which an employed man is entitled on his retirement today with the required yearly average of 50 contributions paid or credited since 1948 is covered by the employer's contribution, the employee's contribution and general taxation, respectively …?"—[OFFICIAL REPORT, 9th June, 1969; Vol. 784, c. 186–7.]
The answer in a nutshell was that the employed married man, in the 20 years since 1948 when the Beveridge scheme first came into play, had, if he retired this year, contributed 8 per cent. of the cost of his pension.
This great thesis that the Government have, that people want to buy pensions with their contributions, has never been in force at any time. It is based on a complete lack of fact. It is based on wishful thinking or conventional wisdom—I do not know which; but certainly it is not something which should not be challenged. Lip-service has been paid to it for many years from both sides of this House, though in the last debate it was almost admitted that its only advantage is, perhaps, psychological. But I suggest to the House that a man earning say, £25 per week who has various deductions made from his pay cheque—and one of them at the moment, if he was not contracted out, would be a sum

of 26s. for his insurance contribution—would feel no psychological difference at all if that 26s. was not separately identified in his wage slip but was simply part of a larger sum deducted overall from what he was meant to receive, provided, of course, that his pension at 65 was guaranteed by an Act of Parliament, as it is today. His total deductions would be the same and his take-home pay would be the same.
I suggest that before the Government base their whole policy on the thesis that that man would object to that particular deduction losing its identity, they should take steps to see whether he would or not, and should not rely on what Beveridge laid down in 1942 in the middle of a war at a time when social conditions in this country were very different from what they are now. There are ways and means of finding things out today through market research programmes, and I contend that this belief, held for such a long time, is in urgent need of re-examination. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) suggested a second Beveridge, and this could be one of the themes on which such a committee could now concentrate.
A powerful support for the abolition of the contributory system has come recently from Sir Paul Chambers in his Beveridge Memorial Lecture when the deviser of our unique pay-as-you-earn system with all its complications pointed out that the Government's new proposals for pension contributions and benefits are outrageously complicated and could be drastically simplified by the abolition of contributions and paying for all the provisions out of taxation. The right hon. Gentleman, responding to Sir Paul, said it would mean a very great increase in the standard rate of income tax—in one case put at 5s. 7d. and in another at a 6s. 9d. increase. I will not argue on that, but he said it would be very large. But this is not so because, as Sir Paul pointed out, any increase in taxation necessary to pay pensions would be exactly balanced by the reduction in contributions from employers and employees so that no more in total would be paid. The only difference would be that the tax, now known as a contribution, would be known by its proper name of a tax, and the enormous administrative task of recording every individual's contribution


and keeping records, which in most cases have to go back over 40 years, could be eliminated.
In brief, since all taxation, including pensions contributions, goes towards financing Government expenditure, including pensions, in the year in which they are collected, why not abandon the whole expensive farce of pensions ostensibly being earned by contributions?
I wish now to turn to the second suspect principle on which the scheme and the Bill and its implications are founded. The Bill provides for graduated contributions on earnings between £18 and £20 a week to be increased from ½ per cent. to 3¼ per cent. for all contributors, including those contracted out. This will cause an increase of 7s. 7d. per week in contributions to a man earning £30 a week or above, making a total weekly payment for the man of 34s. per week, an annual total of £88 4s. or, for a man on £30 a week, nearly three weeks off his gross wages. Perhaps one can accept that at this minute it is the only practical way of raising the money so desperately needed to pay for the pension increases which must come in the autumn, and to balance the books not this year but next. But then, not in the Bill but in the White Paper which we have had to cover the Bill, the right hon. Gentleman gratuitously announces the additional graduated contributions or increased graduated pension rates, both for those participating in the pension scheme and for those contracted out. Nothing is said about the cost or how the pensions are to be paid for. Last week, the Economist calculated—

It being Ten o'clock, the debate stood adjourned.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That the Proceedings on the National Insurance (No. 2) Bill and the Tanzania Bill [Lords] may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Harper.]

Orders of the Day — NATIONAL INSURANCE (No. 2) BILL

Question again proposed, That the Bill be now read a Second time.

Mr. Fortescue: The Economist calculated that this would cost about £200 million a year as early as 1980. We have no idea from where the money is to come.
What arguments has the Secretary of State advanced in favour of a compulsory earnings-related State pension? They are given in the January White Paper. Careful study shows that they are entirely self-contradictory. In paragraphs 27 and 28 it is pointed out that people hope that their retirement income will be as near as possible to their average earnings, which is a blinding glimpse of the obvious. Then, with a leap in logic worthy of "Spring-heeled Jack" himself, it is concluded that because most of the occupational schemes are earnings-related it is all the more important that the State scheme should be based on the same principle.
Why? Because, according to paragraph 28,
If it were to be kept basically flat-rate, retired people would continue to be divided into two nations—those with good occupational superannuation, and those with little or nothing to add to their basic State pension.".
While one is still wondering whether this means that in the cause of one nation-hood occupational schemes should be abolished—and some of the new proposals go very far towards that end—one comes to paragraph 45, which points out:
As a result of the growth of occupational pension schemes … people will increasingly become entitled to superannuation consisting of two parts. … For them the State scheme will serve as a foundation for the type of provision which occupational schemes are most suited to provide.
Paragraph 46 reads:
Occupational pension schemes have an important part to play in partnership with the State scheme. … The best foundation for the success of occupational schemes is the existence of a substantial basic compulsory State scheme …".
But nothing is said about this State scheme being earnings-related. Therefore, the one argument advanced early in the White Paper in favour of compulsory earnings-related State pensions—that without them retired people would be divided into two nations—is contradicted and demolished later in the White Paper, where it is pointed out, with approval, that these two nations will exist anyway. The Secretary of State looks puzzled but it is his White Paper. If


he studies it again, perhaps tomorrow, he will see that there is much substance in what I am saying.
Where has the Secretary of State gone wrong? I believe that he has confused what Beveridge called a subsistence pension—and it will be recalled that Beveridge never planned to provide anything higher than a subsistence pension—and what the right hon. Gentleman calls an "adequate" pension. He argues convincingly that the subsistence pension concept has failed and has led to the present position in which large numbers of pensioners must have their pension supplemented by supplementary benefit.
The right hon. Gentleman says that people must have an adequate pension—I agree with him entirely—and this must be adjusted periodically to take account of the cost of living. He even quatifies this concept. He states that at April, 1968, prices the figure would be £6 12s. a week compared with £4 11s. now, with 1s. for the graduated contribution. But nowhere does he explain why it should be considered the business of the State to provide for a State pensioner any more than that amount.

Mr. Crossman: That what amount?

Mr. Fortescue: Than £6 12s., which is the "adequate" pension which the right hon. Gentleman quotes in his White Paper. One of his basic objectives is that benefits must normally be sufficient to live on without other means.
Why, then, should the State erect this highly complicated machine to give some people—by definition, those best fitted to save for their old age—more than the "adequate pension" defined in the White Paper? What sort of social justice is this? Why should not the pension be paid on a flat rate, adjusted regularly for cost of living changes, and why should not contributions to such a pension be on a graduated or earnings-related basis? This simple and practicable alternative is dismissed in half a sentence at the beginning of paragraph 110 of the White Paper, with no arguments deployed against it.
It is interesting that in our last debate on this subject, when the hon. Member for Cornwall, North (Mr. Pardoe) deployed exactly this argument, the right hon. Member for Sowerby (Mr. Houghton)—whom we have missed very much in this debate—said that this

would not be possible. The theory of graduated contributions for flat-rate benefits was not possible because, he said, it would not be acceptable to the trade union movement. Considering what the Government are doing at the moment to discover things which are not acceptable to the trade union movement and to give them legislative force, perhaps the argument does not carry much weight, at least on this side of the House.
Although the unemployed and the sick are casualties of society and thus can be said to warrant earnings-related benefits, the fit man of 65 is not such a casualty. The fact that he will retire at that age has been known to him all his working life. If his State pension is adequate for him to live on, without other means, as the White Paper says it should be, it is his responsibility and not that of the State to make arrangements over the years to supplement that pension if he so wishes.

10.7 p.m.

Mr. Marcus Worsley: I am glad that the Secretary of State has been able to join us again to wind up the debate—partly because the House always welcomes his speeches and hears them with attention and partly because many of us are looking forward to hearing him retract the words which he used in describing my right hon. Friend's scheme some years ago as a "Tory swindle". If he does not withdraw those words, he is himself ten times condemned.
Also—I say this in no critical spirit, because the right hon. Gentleman has, I imagine, been busy on those matters to which my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) elliptically referred a moment ago—he has missed a great deal of this debate and I hope that he will study very carefully what has been said.
We have had an interesting debate, which has run, as it was bound to do, extremely wide, and has in many ways been a preliminary first canter over the course—for this autumn's major event.
We on this side are not dividing against the Bill, for two reasons. The first is that we realise that pensioners must get some relief after the massive price rises under the Government; and these pension rises—as the right hon. Gentleman has been frank enough to admit—will not do more than the bare


minimum, and not enough for his hon. Friend the Member for Manchester, Gorton (Mr. Marks).
I hope that this answers the question of the hon. Member for Rowley Regis and Tipton (Mr. Archer). We support an increase of this kind. We regard it as inevitable and necessary. Also, we have made it clear as a party and it was repeated in what I might call our midterm manifesto last autumn. I will quote only one paragraph:
Old-age pensions, sickness, unemployment, widowhood and industrial injuries benefits are paid in return for insurance contributions. There is no question of introducing a means test for them.
That is our party policy, and has been made clear many times.
The second reason that we are not dividing tonight is because we all accept that contributions must move from flat-rate to graduated, although, on that general principle and within it, there are qualifications which the Government have not made on this occasion. But, at the same time, when the right hon. Gentleman studies the report of the debate, and from the lement which he has heard, he will be in no doubt about the extent of the criticism from this side, first, of the actual handling of this particular affair.
It was characteristically chivalrous of the right hon. Gentleman to allow his right hon. Friend the Chancellor of the Exchequer to take the credit for the announcement of the increases in the Budget. This was charming, but it would have been better if the right hon. Gentleman had sent along the Bill as well. On the final day of the Budget debate, the Chancellor seemed to think that would be ungentlemanly to be too curious about where this money was coming from. We had to go on asking and we put down a censure Motion before we discovered the total cost, and it was even a month after that before we discovered how the Bill would be worked out. There has never been a precedent in the whole of the National Insurance Scheme for an increase being announced without the method of paying it being announced at the same time. I challenge the right hon. Gentleman to produce such a precedent. I do not believe that he can. I have no doubt that the muddle into which Government business has fallen is a main

reason for this event, but it is extremely important that this should not be a precedent to be followed in future.
We have had, as we always have in these debates, a very full discussion about the phrase "the contributory principle".
The basic element in the contributory principle is the simple proposition that the finance of the State pension scheme is kept wholly separate from the general body of Government finance. This is the separation which Sir Paul Chambers would wish to abolish—[Interruption.]—and I was not sure whether some voices below the Gangway on this side of the House would also go that far.
One must draw a distinction between that proposition and the proposition that anybody in the House seriously thinks that the National Insurance Scheme is actuarially sound. It does not follow that because one accepts that this is not an actuarially sound scheme that one wishes to throw overboard the whole contributory principle. This principle, which establishes that money contributed for pensions goes only on pensions, is a concept which must be preserved at all costs. If one muddles this money up with the general sum of Government finance one will cause, first, a serious financial muddle within Government finance and, secondly, a crisis of confidence among those who have contributed in the past and expect to receive pensions.
There is, therefore, this important distinction to be made. What we have is a "pay as you go" scheme. The money that is contributed today does not go into a pension for one's old age, but into a pension that is paid to somebody else today. That is what "pay as you go" means, but it does not follow from this that the contributory principle is not of the greatest importance.
If it is that important, it is so because there is, in the public mind, a sense of relationship between the cost of pensions It is, therefore, essential that when the Government wish to increase the pension scheme they should state the cost at the same time. If they do not do this they are themselves attacking the contributory principle.
We should preserve this principle for the simple reason that it restricts the demand on the National Insurance Fund to


what is reasonable in a politically sensitive area. If we do anything to blur this distinction, as the Government have done, we will be setting a serious precedent. We are, therefore, critical of the Government in this respect.
The debate has ranged wide. I was particularly sorry to miss—I had to leave the Chamber at the time—the speech of my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), but I assure him that I shall study the OFFICIAL REPORT of his speech with interest because, as the hon. Member for Cornwall, North (Mr. Pardoe) said, my hon. Friend's remarks are always stimulating. I will keep my remarks within bounds and will range less wide than some hon. Members, for I wish to relate my comments as closely to the Bill as possible.
Before coming to the details of the Bill, however, I must comment on the muddle into which national insurance finance has got. It is clear, not only from the Government Actuary's Report but from past reports, that the Government have consistently got their sums wrong in respect of national insurance finance since they came to office. That must evoke in our minds the greatest concern.
Last year we had the Public Expenditure and Receipts Act, the contents of which were as bizarre as the Measure's name. We had an increase in contributions without any increase in benefits. This followed not long after the 1965 increase, which, again, was a bigger increase in contributions than in the benefits then demanded. Then we had a raid on the Reserve Fund of the National Insurance Scheme. In the debates of last year we did not have a warning from the Government that yet another increase was just around the corner, in addition to the amount needed to increase benefits.
I am not suggesting that the Government Actuary has been making mistakes in his predictions. I am sure that he has not. Nevertheless, the fact remains that the Government, with all the advantages of his advice, have been unable to estimate correctly from year to year how the finances of the fund will work out.
I accept, of course, what the Minister said, that relatively small movements make relatively large differences. How-

ever,
I draw two conclusions from this. The first is that all the figures in the White Paper, Command 3883, are now out of date, almost before the ink on them is dry, and that the assumptions on which they are based are also out of date. The second—and this is the nub of the matter—is that it has been shown that the Government, with all their resources and reliance on the Actuary, cannot foretell the movement of national insurance finance in detail more than a year or two ahead.
Does it not follow that we should not lay on future generations burdens the extent of which we cannot determine? Command 3883 commits our children to enormous and precise burdens linked to the concept of the average wage, a concept which, in itself, may look very different in 20 years' time. We are committing them to burdens for which, as my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, we are making no precise provision.
These burdens, if the precedent of the last year or two is anything to go by, will increase enormously in weight. They may prove insupportable but—this follows what my hon. Friend the Member for Garston said—they may also prove unnecessary because we do not know anything about the society in which our children will live, except that whatever it is like it will be widely and enormously different from our own. The lesson I draw for the future from the terrifying miscalculations of today is that we should be a little more modest in our projections for the future and let future generations decide much more how they want the scheme to be expanded, if they so decide and believe such expansion is needed.
I come to the matter of the Bill, the exact method which the Government have chosen to meet the current deficit. It is by confession a stop-gap and when the party opposite leaves office shortly, as it will, it will leave in operation a scheme confessedly in a muddle and on the Statute Book pie in the sky. Even accepting the Government's decision to put a third of this cost on to flat-rate and two-thirds on to graduated, it is both characteristic and alarming to see what actually has been done. The Government have put on to the £18–£30 bracket a graduated contribution without the right


to opt out. My right hon. Friend the Member for Kingston-upon-Thames rightly made this area of the Bill the main burden of his speech.
The Government are creating an ungainly system of a sandwich of which the lowest slice is the flat rate with no contracting-out, the top slice is graduated with no contracting-out, and the jam in the middle is subject to the contracting-out provisions of the 1961 Act. The important point in this context is that, taking the scheme as a whole, the contracted-out element is very much less proportionately than it was after my right hon. Friend had introduced his scheme which became operative in 1961. In 1961, for instance, the proportionate key figure contribution of a contracted out individual and one who had not contracted out was 79·9 per cent. From November, that proportion will be, in the case of a £15 a week man, 88 per cent. and, for a £30 a week man, 84 per cent. In other words, the Government have whittled away the rôle of the contracted out element of the occupational schemes in the provisions of pensions.
This is a very alarming precedent, not only because of the right hon. Gentleman's record and what he said on this subject in the past about his general hostility towards the occupational schemes—[HON. MEMBERS: "Oh!"] Yes, indeed.

Mr. Crossman: I should be grateful if the quotations could now be given.

Mr. Worsley: The right hon. Gentleman must know that in every debate on this subject we have produced the quotations against him.

Mr. Crossman: Never.

Mr. Worsley: The right hon. Gentleman has said, for instance, that he would produce a scheme which would be very hard to get out of. That was before he got into office. I challenge him to deny this.
There is not only this, but those of us who have studied what has happened on the Continent have found that where schemes have been introduced, no doubt with the best of intentions, with a substantial contracting-out element, just this

sort of difficulty arose as the fund became short of finance.
The first thing that happened was that the contracting-out arrangements were whittled away and then abolished. This has happened in Belgium and Germany, two countries which had contracting-out arrangements and have now abolished them, I understand. Therefore, since we have seen in Britain with the present Government, confronted with a financial crisis, a tendency to whittle away the contracted out element of the scheme, this is a very serious precedent and raises the gravest doubts about the rôle of private and occupational pension schemes in any scheme devised by the right hon. Gentleman.
Apart from the actual content of the Bill, there is side by side with it the proposal in the White Paper which has been widely referred to, though fortunately not in the jargon term of dynamising the bricks, whereby the actual terms of contracting-out in the 1961 scheme are proposed to be altered retrospectively.
Taking the two things together—what is in the Bill and what is proposed in the White Paper—we find confirmation of our original concern. This was the prime reason why, on a reasoned Amendment, we voted against the White Paper, because we fear that occupational schemes, the only sort of pension provisions which produce savings, are likely to be whittled away under any scheme put forward by the Government. We shall look with very special care at anything that is suggested in the future.
I have no doubt that for the general population what will be noted is not so much the subtleties of contracting-out as what is likely to happen in the future. It will not be long-term prospects, but current burdens. The Government have doubled the money taken annually in tax generally. The hon. Member for Rowley Regis and Tipton chided my noble Friend and asked what S.E.T. had to do with the Bill. What counts for the individual is the total burden of tax. Whether it is tax raised for this subject or for another is much less important than the total burden. Just taking the direct charges through the National Insurance Fund alone, under this Government the increase on the individual is between 50 per cent. and 70 per cent., according to income.
I said earlier that we accept the general principle of a graduated contribution, but we would accept it only as part of a general rearrangement of taxation which would give back incentives to the individual. This increase in graduated contribution is on top of a rate of direct tax which is biting increasingly hard, first, as a result of past Government action, and, secondly, and increasingly, through present inflation. This increase in the Bills adds to the disincentive effect of our total tax package, because it comes on top of these other direct taxes. It is yet a further discouragement to the man who seeks to do better.
I hope that the Secretary of State will say something about the relationship

between national insurance contributions and income tax. Originally, as I understand, national insurance contributions were intended to be chargeable against income tax. It was only for administrative convenience that they ceased to be so allowable in return for an adjustment to the allowances to compensate. Once graduation is introduced, as the right hon. Gentleman is introducing it in the Bill, the compensation given in allowances is no longer effective. Has the Secretary of State considered this matter?
We believe that this graduated tax, in addition to the already excessive tax burden imposed by the Government, has such a severely disincentive effect that it needs careful Government attention.

10.30 p.m.

The Secretary of State for Social Services (Mr. Richard Crossman): I must, first, thank hon. Members, particularly on the opposite side of the House, for their courtesy in accepting the fact that I had to be absent from the House for some time, not of my own free will, but because I had to be in some other place. To reply to the hon. Member for Chelsea (Mr. Worsley), I shall study HANSARD with the greatest care and learn all that I can from it. I will try to reply to all the points raised—my hon. Friends have been making notes of those raised when I was absent.
I have studied, as the hon. Member asked me, the impact of raising this large sum and I am staggered by its smallness, not by its size. True, some hon. Members have complained about the delay between the announcement of the benefit and the contributions. Those who have studied the Bill and the balance we have achieved will see that we spent our two months very well, in achieving a scheme which has come through the House virtually unscathed. There has not been a single speech to suggest that the balance in paying for the contributions is unfair or improper. This required a great deal of negotiation and discussion with interested parties.
The hon. Member for Chelsea said that the burden was very heavy, if added to the existing taxes. There is this to be considered about the National Insurance contributions—every penny of it goes to paying for benefits. If he says the contributions are too heavy, he must mean that the benefits are too heavy, because they exactly match. It is astonishing that there has been this argument. Does the hon. Member mean that he would not have made the 10s. increase in the basic rates? Does it mean, as I suspect that the new earnings-related sickness and unemployment benefit, with the substantial increases, are wasteful or extravagant?
When hon. Gentlemen opposite talk about the heaviness of the burden they never say which expenditure they would cut. We have entirely failed to get this out of them. If they say that the benefit increase is right and just and if they sometimes give the impression that they would make even more generous benefits, they have either to increase contribution

levels or taxation. There is no other way to pay for these benefits except the reliance on private insurance.
I was grateful to the hon. Member for Chelsea when he talked about the principle, although he defiled that a little later by talking about taxation, but that was the mere fallback into Kensingtonian language. For contributory fans like myself and the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) the only content of the contributory principle is one's belief in it. It is a striking fact that these questions whether a thing is a tax or a contribution is largely a matter of what a person feels about it.
If one feels strongly about something as a tax it is turned into a tax and then wages are forced up to achieve and destroy it. There is a great deal in the question of the public consensus. If the public consensus is that something is a tax it becomes a tax and we have that now. The hon. Member for Kensington South (Sir B. Rhys-Williams) made, I am told, a long speech—I think it was his usual speech about his passion for taxation. He wants no fine differences. They are all taxes. I suspect that he is an addict of the negative income tax. We may even have another long speech on the virtues of negative income tax.
All the evidence goes to show that people in this country regard contributions as quite different from taxation, and they recognise the relationship between contribution and benefit. I quote the example of the Bill that we have before us. If, instead of raising this amount of money in contributions, we had sought to raise it by increasing income tax, I suspect that the public reaction would have been quite different and much more hostile. I would ask hon. Members to consider this carefully.
The Liberal case was that there is no difference at all—

Mr. Pardoe: The right hon. Gentleman was here when I made my speech. I thought that I made it clear. I am in favour of a distinctive tax for social security purposes—not income tax, but a payroll tax, and quite separate.

Mr. Crossman: It occurs to me to wonder whether he would have a graduated tax and a flat-rate benefit.


However, I am now dealing with whether contribution and tax are the same.
In this country, people react differently to them, although the principle of contributions has been greatly undermined during the past 10 or 12 years. The main object of our scheme will be to restore the contributory principle and make people see how intimately related the benefit, however received, is to the contribution that they pay. This is more possible with a graduated scheme.

Sir B. Rhys Williams: The right hon. Gentleman still has not studied my speech, so I must make it again. The essence of what he has not yet understood is that it is possible to turn income tax into a contribution, and, under his leadership, the public would learn to see it that way.

Mr. Crossman: Let me put a simple thought to the hon. Gentleman on the distinction which the public and I make between contribution and tax. By a contribution, I mean something I pay in and thereby acquire an entitlement to a benefit related in value to it. I pay the contribution and, in return, I get a benefit related to the contribution. If I paid taxes and got a return on my taxes related to the tax, I would be very happy. But I do not.
To take the example of schools, we pay graduated taxes and get the same education. We do not get a better education if we are in a higher income tax bracket. We get the same education. That is the difference between a tax which pays for a service and a contribution which gives an entitlement to a certain relevant pension.
I am glad that the hon. Gentleman gave me the opportunity to spell out the difference which the hon. Member for Chelsea spelt out, and I watched the chagrin below their Gangway at the fact that the two Front Benches were in accord on the difference between contributions and taxation, which is not the same as that which the hon. Member for Kensington, South makes.

Mr. John Nott: I think that the right hon. Gentleman is saying that the contributor will get out of the pension scheme in 1990 what he pays in earnings-related contributions today.

Mr. Crossman: If the hon. Gentleman had been here to listen to more of the debate, he would know that that is not what I or anyone else said.
I come to the question raised by both hon. Gentlemen on the Front Bench opposite, what was described as the contributions "muddle", or the claim that we should have been able to avoid the deficit in the National Insurance Fund.
I can only repeat here what I said before. First, my hon. Friend in his first speech gave us a wise reminder. We are dealing with very large sums, and a 1 per cent. miscalculation gives a difference of £50 million a year. Demography in this country is still in its infancy for accuracy. As the right hon. Member for Kingston-upon-Thames knows, the miscalculation about childbirth which dogged the Conservative régime for years was a miscalculation of the demographers.
If we have to rely on demographical calculations, as we must, and find that we have under-estimated the growth in the number of old-age pensioners and the years they will live, yes, we plead guilty, but Governments have to rely on the best calculations they can get, and they will be wise not to try to look too far ahead. Two or three years is a wise estimate of the length of time for which it is possible to say that one knows how the calculations will go. This is what the right hon. Member for Kingston-upon-Thames asked me about when he referred to the Government Actuary's report.

Mr. Boyd-Carpenter: rose—

Mr. Crossman: Perhaps the right hon. Gentleman will reply to me when I have first replied to him. I will reply to the question he asked.
The right hon. Gentleman wanted to know whether the Government Actuary was directed to limit his report to the period up to 1972. The answer is that he was not, and, if he had been, he would have said so in his report. He explains in paragraph 6 of his report that he does not think it is necessary to produce long-term projections. Of course, the Government knew of his intention to project to 1972, and thought that was wholly sensible. What would be the point of doing a long-term projection on a scheme which will be wound up in


1972 and for which a new scheme will be substituted? The answer is that he did so, we thought sensibly, but he did it because he thought that it was sensible and not because we told him to.
The Government Actuary thought it sensible that we should not project our calculations too far because we may not be right either about the number of the old or about the number of unemployed and sick. I will not go through it all over again, but in each of those years there were considerable differences which had to be made up.
The hon. Member for Chelsea asked whether we should commit our children on such a large scale in view of the impossibility of calculation. He made the point very well and cogently. My personal view on this is that we are committing our children in a very modest way. When we introduce the new pension scheme in 1972 the net effect will be in the course of 20 years to transfer 2 per cent. of expenditure from those who work to those in retirement. Over a period of 20 years there will be a redistribution between tthe retired and working population of 2 per cent.
Is that a fantastic burden to impose? It seems to me extremely modest. We are beginning in a modest, cautious way to redress the greatest social scandal of our period, which is the neglect of the old and the denial to the old of their fair share of prosperity. Our calculations are not over-bold. The calculations have been cautious and realistic in the knowledge that people must accept this. I believe that with greater education over the years people will accept it more readily and will look back at our period and see it as fantastically harsh towards the old.
When they look back and see what living conditions we set for millions of old people, it will look to them in 20 years' time as Dickens's novels look to us. They will be deeply shocked by what we did, and will be pleased that we made some effort and transferred 2 per cent. over 20 years. It will be a revelation of how steel hard the nation's conscience was in that period.

Mr. Fortescue: Could the right hon. Gentleman say a little more about the 2 per cent.? Two per cent. of what to whom and how?

Mr. Crossman: If the hon. Gentleman will look at the economic appendix of the White Paper, which obviously he has not bothered to look at, he will see the figure there. It is 2 per cent. of the expenditure of those at work transferred to the total amount of expenditure of those in retirement. If he will look at the last page, he will see that, having been contributed by economists, it is very readable.
I turn to the speeches of my hon. Friends the Member for Rhondda, West (Mr. Alec Jones) and the Member for Rowley Regis and Tipton (Mr. Archer). I am glad to say that they noticed the small concession on death grant because, although small, it is human and humane and will be greatly appreciated. I am glad that they mentioned it.
One of them referred to the earnings rule. It is true that we have raised the income limit, but I would remind the House of an extraordinary fact. One hears a great deal of talk about the earnings rule and retirement, but the staggering fact is how very few people are affected by it. I have the figures. We have 7 million or so retired pensioners. We have 1½ million people in the one band in that position, and only 16,000 of them are at any one time affected by the earnings rule. It is an interesting fact because, although the earnings rule is enormously important psychologically, it does not bite very hard. But every time it bites a person, he does not forget it and tells his neighbour.
The right hon. Member for Kingston-upon-Thames asked me about supplementary benefit. I am sure that with all his experience as a previous Minister he knows exactly what happened. He well knows what I and my hon. Friend meant by explaining that the instalment for the people drawing supplementary benefit last year meant that they were not entitled to 10s. this year, unless every second year we were prepared to raise the level of supplementary benefit as against the level of the national insurance pension.
This brings me to a point that I have to consider seriously. There would be one way to avoid this awkward leapfrogging with its sense of injustice. That would be to make the biennial review into an annual review. With an annual review the two could be kept in line with each other. It is because the Supplementary Benefit Commission rightly


thought that it was not a matter of assessing a pension, but a matter of assessing actual need, that there had to be the leapfrogging. That would be avoided if there were an annual review, but an annual review would cost a lot more money.
We are beginning the scheme on a cautious note. I would not be surprised if pressure developed leading people to think of the advantages of an annual review.

Mr. Boyd-Carpenter: The Secretary of State may have misunderstood my point. The point I was making was not that he was now doing anything wrong, but that in 1958, when his predecessor did precisely what he is doing, the right hon. Gentleman described it as a swindle. I was congratulating him on his belated conversion to probity.

Mr. Crossman: Then this is another occasion for saying that I am grateful to the right hon. Gentleman for his education of me in probity.
The right hon. Gentleman also asked me for a thorough survey. We did a very thorough survey in the White Paper, and I do not think that we want any more researches or facts. We had better have some decisions. The House will prefer it if next Session we present it with a Bill over which it can argue and see whether it is right, rather than to have a long and detailed survey of what is going on.
I come to the position of the dynamists. I thought the hon. Gentleman who made the first attack was a little ungenerous to me. He described this proposal to revalue the credit element—the Boyd-Carpenter pensions—as meretricious. He gave the impression that it was only somebody like a Labour politician, or even an intellectual socialist politician, who could dream of doing such a thing. He said, "Look, the Economist is against you."
I have here a list of the people who wrote and asked me to do this. This letter comes from Imperial Chemical House, Millbank—not a domain of the Socialist intellectuals. The gentlemen who urged this as the course of common justice were the managing director of the British Petroleum Company, the personnel director of Courtaulds, the deputy chairman of I.C.I., the vice-chairman of

Shell-Mex, the director of the Imperial Tobacco Group, the managing director of Shell, and the vice-chairman of Unilever. Looking through this batch of names, meretricious intellectualism is not the description that I should give to all these respectable gentlemen.
These gentlemen wrote to me when the White Paper was published saying that in it I had done an unconscious but outrageous injustice to their workers. They said that I was proposing to uprate every two years all flat-rate pensions, all the old and all the new pensions, and that the only thing I was going to leave unuprated was this little graded element which millions of loyal workers paid to the Government in exchange for a pension. They asked how I could leave that bit out when I uprated all the old flat-rate pensions and all the new graded pensions. They asked how I could leave Boyd-Carpenter out of the upgrading; how I could fail to make an honest man of him, to use a phrase often related to women.

Lord Balniel: The right hon. Gentleman is introducing inflation-proofing for those who are still contracted into the State scheme. He is, however, not making any financial provision for this. I should like to ask him a simple question. How much will it cost, for example, in five or 10 years? The right hon. Gentleman is making no financial provision for it. He is not, however, inflation-proofing those who have contracted out. In January, 1969, in his White Paper, he said that this would be quite unfair. What has made the right hon. Gentleman change his mind?

Mr. Crossman: That is a long question, but I was just coming on to explain that. When we brought out the White Paper, all these gentlemen wrote to me, on behalf of the millions who were inside the scheme, and said that it was unfair on them. Frankly, I had not thought of doing it beforehand. The hon. Gentleman will see from the White Paper that we thought that we could not touch it. It may be that with my malicious attitude towards Boyd-Carpenterism. I thought that I would leave it to wither away in its Boyd-Carpenter pristine purity as a non-upgraded piece of sixpence worth nothing in 30 years' time. I thought that it would be nice to watch it wither.
But the moment that these gentlemen wrote to me I saw that there was an injustice. I realised that we had a choice between helping the 14 millions in the scheme or the 5 million out of it. Anybody who had contracted out would resent anybody inside the scheme getting a fair deal. This is human nature. So I had to look at it very carefully and say to myself: what case is there? I read this powerful argument, because these are powerful gentlemen. They said, "We were loyal. We stayed by the Government scheme and, as a result, we got very poor value for our members, whereas the people who contracted out had large sums, which would have gone in contribution to the Government scheme, available for investment in equities."
I was told that during these last eight years the equity market has been healthy—

Lord Balniel: rose—

Mr. Crossman: I should like to finish the argument. The time to correct me is when I have finished it.
I was told that if I looked at the last eight years I should see that the people who took the money instead of contributing to the Government scheme and put it in equities on behalf of their members were the far-sighted stewards with their talents, because the equities swelled and grew so that the members of those pension schemes did very well. Therefore, we had a broad picture of the people in the Government scheme—the frozen Boyd-Carpenter scheme—acquiring small value for their contributions while those outside were acquiring rich, bounteous value for the money that they were not contributing to the Government.
I admit that there were people outside who squandered their talents, who did not invest them on behalf of their members. Those members have not done quite as well. But I know that pension trustees are wise and provident men, and generally the investments were in portfolios, and I have no doubt that those outside did better than those inside. Therefore, I was finally convinced that as a last farewell move as we wound up the scheme in 1972 we would revalue the bricks.
I do not deny that there are difficulties for some who have contracted out, for some of the nationalised industries, and so on, but, on balance, I thought that the case was fair, and it was greatly strengthened by the need to increase reliance in the graded element by an increase from ½ per cent. to 3¼ per cent. If we had not done that, and left it with the kind of Boyd-Carpenter value that we had, there would have been a grievance about it, so we had to say to the people who had contracted in or out, "You will all become contributors to the Boyd-Carpenter graduated scheme, and all benefit by having your Boyd-Carpenter bricks revalued every two years".
That was a modest proposal, and I am glad that it has excited interest, but it was natural that hon. Gentlemen would want me to explain it, and I have explained it with my usual candour and good sense.

Sir B. Rhys Williams: The right hon. Gentleman is being unfair to the Life Offices Association by giving only one side of the case. Will he explain what he will do about people in integrated schemes?

Mr. Crossman: The Life Offices Association presented its side of the case. It opposed what I did. The C.B.I. supported it. The T.U.C. urged me to do it. The National Association of Pension Funds, representing the overwhelming number of trustee pension funds, committed itself in favour. It was after a careful assessment of where the big battalions lay that I finally decided on a bold and courageous course.
I hope that it is crystal clear that this has nothing to do with the Bill, strictly speaking, because it is concerned with the next Bill to be introduced next Session, but it was an important part of the package, and since it was the first modification of the White Paper I should like to remind the House again that the White Paper was full of green edges. I hope that these green edges will stimulate people into improving our first thoughts, and seeing that our second thoughts are of benefit to them.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — NATIONAL INSURANCE (No. 2) [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to amend the provisions of the National Insurance Act 1965, the National Insurance (Industrial Injuries) Act 1965 and the Industrial Injuries and Diseases (Old Cases) Act 1967 as to the rate or amount of contributions and benefit and otherwise make provision as to the subject matter of those Acts, it is expedient to authorise the undermentioned payments out of moneys provided by Parliament—

(1) in connection with the increase of contributions under section 3 (flat rate contributions) of the National Insurance Act 1965 or under section 2(1)(a) of the National Insurance (Industrial Injuries) Act 1965, the payment of any resulting increase in the sums so payable by way of exchequer supplement under section 7 or, as the case may be, section 2(1)(b) of the Act;
(2) the payment to the National Insurance Fund, in addition to the Exchequer supplements under the National Insurance Act 1965, of the sum of £10 million in respect of the financial year 1969–70 and of £45 million in respect of each subsequent financial year;
(3) subject to the provision made by section 85 of the National Insurance Act 1965 for reimbursement out of the National Insurance Fund, or by section 61 of the National Insurance (Industrial Injuries) Act 1965 for reimbursement out of the Inlustrial Injuries Fund, the payment of any increase attributable to the Act of the present Session in the expenses of the Secretary of State for Social Services or any other Government department which are so payable under either of those sections (any reference in this paragraph to section 61 of the National Insurance (Industrial Injuries) Act 1965 being taken to include that section as applied by section 13 of the industrial Injuries and Diseases (Old Cases) Act 1967).—[Mr. Ennals.]

Orders of the Day — TANZANIA BILL [Lords]

Considered in Committee.

[Mr. SYDNEY IRVING in the Chair]

Clause 1

MODIFICATIONS OF BRITISH NATIONALITY ACTS

Question proposed, That the Clause stand part of the Bill.

10.59 p.m.

Mr. John Biggs-Davison: The Clause which we are now asked to make part of the Bill substitutes the new style of Tanzania for the terms "Tanganyika" and "Zanzibar" in the list of Commonwealth countries contained in the British Nationality Act, 1948, and subsection (3) in particular makes provision in respect of the persons who, being British-protected persons by virtue of their connections with Tanganyika immediately before Tanganyika became independent, did not become citizens of Tanganyika.
I should like to draw the attention of the Committee to a former British-protected person who has deserved well of Zanzibar and of Britain. He is very much affected by these nationality provisions. I refer to Ahmed Seif Kharusi, now resident in Southsea, a teacher who trained under Professor Hollingsworth and served for five years in the education department of Zanzibar. He was highly respected and has a cousin who was a rural district commissioner under the old order.
Mr. Kharusi was a member of the national party, and of its executive, and was on the editorial board of the party newspaper, "Umma". On the eve of the revolution in 1964, he was summoned by the commissioner of police, who was British, to take part in the defence of Malindi police station. Armed with a ·22 rifle, he helped to fight back insurgents armed with automatic weapons. The battle continued all day. Eventually, 16 Zanzibaris, including Mr. Kharusi, escaped in the Sultan's yacht.
Mr. Kharusi now wishes to acquire British nationality. He has applied to


the Home Office and has received an extraordinary communication, over an indecipherable signature, dated 2nd June. It said:
… possession of an old British passport indicating birth in Zanzibar would normally be prima facie evidence that the holder was a citizen of Tanzania, since we understand that, in general, persons who were born in Zanzibar automatically became citizens of Tanzania.
However, proviso (i) to paragraph 2(1) of the 4th Schedule of the Tanzanian Citizenship Decree of 3rd November, 1964, specifically excludes from citizenship of Tanzania 'any person who, prior to Union Day, had been deprived of his status as a Zanzibar subject, or deported or exiled from Zanzibar.'
In view of your close association"—
This is one of the most extraordinary sentences to emanate from a Government Department—
with the former Sultan of Zanzibar, we need to see confirmation from the Tanzanian authorities that you are currently regarded by them as a citizen of Tanzania before we can proceed with your application.
It is as though, in the 1920's, a Russian exile had taken part in the civil war on behalf of the Czar against the Bolsheviks, and then sought the nationality of this country, as some did, only to be required to get confirmation from the Bolsheviks that he was regarded by them as a Russian, or, in the 1930's, as if a refugee from the Nazi terror, seeking our citizenship, as many did, was directed by the Home Office to seek confirmation from the Third Reich that they regarded him as a German.
I need not say more. Probably insufficient thought was given to the letter sent to Mr. Kharusi. Probably the Home Office is not familiar with what has happened in Tanganyika and Zanzibar and what is now happening in the republic known as Tanzania. I am grateful to the Under-Secretary of State for Foreign and Commonwealth Affairs, to whom I have given notice of this case, for listening to me, and I know that he will want to put this right. I cannot imagine a worthier applicant for British nationality than Mr. Kharusi.
I want also to refer to the case of Mr. Yahya Alawi, and other former officials to whom reference was made on Second Reading, who were not covered by the Public Officers' Agreement of 1965 and who have been denied their due by

the Tanzanian Government. If it is not in the Government's power to right this wrong, or to make the ad hoc arrangement asked for by my hon. Friend the Member for Essex, South-East (Mr. Braine) I hope that my suggestion can be adopted and every effort made by the appropriate Departments to see that those who can still do useful work should have the opportunity of doing it.

11.5 p.m.

Mr. Bernard Braine: As the Under-Secretary of State said on Second Reading, this is strictly speaking a technical Bill which is limited to the effects on British law which flow from the creation of the independent State of Tanzania. This, of course, is a somewhat technical Clause. As my hon. Friends made plain then and as my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) has just made plain now, when these technical provisions are related to human beings the story looms somewhat differently.
In any event, the Bill and this Clause in particular does not absolve any of us from responsibility for what flows from the recognition of the fact of independence. The United Kingdom Parliament once had responsibilities for the peoples of Tanganyika and Zanzibar. One was a mandated territory entrusted to us after the First World War, and the other was a Protected State whose ruler was our friend and ally. The sceptre may have passed from our hands; political responsibility may no longer be ours; we willingly conceded independence: but we cannot be indifferent to the consequences of our actions even in a single case, or, rather, the two cases which have been cited by my hon. Friend.
This Clause, for example, gives Tanzanians the status of British subjects and Commonwealth citizens under United Kingdom law, and it will confer upon them under our law the status enjoyed by all Commonwealth citizens and, indeed, by Tanganyikans and Zanzibaris before independence.
Hon. Members on both sides of the House said some rather caustic things about the regime in Zanzibar. I am not at all sure that we should be extending any privileges under British law to the oppressive regime of that part of Tanzania. I am not at all sure if what was Tanganyika continues to grow and


prosper, as everybody in this House must wish it to do, under the benign influence of President Nyerere, this strange union with Zanzibar will continue.
If we are to accept for the time being that it is to continue, then it would be sensible to take a generous view, but at the very least we should be concerned, before passing this Clause, about those unfortunate British subjects whose hopes and careers were blighted by the actions of the Zanzibar authorities. I make no comment on the first of the cases cited by my hon. Friend the member for Chigwell—he made a strong case which will, I hope be answered by the Under-Secretary of State—but my hon. Friend and I on Second Reading also raised the case of Mr. Yahya Alawi, a Member of the Order of the British Empire, who, after 36 years of distinguished service in Zanzibar, was driven out by the régime, is not being paid his pension, and is living now in this country on National Assistance. I described that on Second Reading as a disgrace, and a disgrace it is.
This cannot be the only case of the sort, and correspondence I have had with the Ministry of Overseas Development suggests that there are others. Therefore, I want to know what action has been taken, before bringing the Bill to this House, to get justice for this man and others like him?
I do not apologise, even at this late hour, for referring to this case, because the House of Commons has always been tender about the rights of individuals. When I raised this case with the Government I was told by the Parliamentary Secretary to the Ministry of Overseas Development, the hon. Member for East Ham, South (Mr. Oram) in connection with Mr. Alawi's right to press that his claim be treated in the same way as that of other pensioners:
My view is that Mr. Alawi's representations to the Tanzanian authorities which draw their specific attention to those other pensioners cannot be expected to result in the payment by Tanzania of his own pension, though he may be placing the continued payment of those pensions in jeopardy.
That was a warning that if this man raised his case with the Tanzanian Government who are responsible for his pension, he might not only not recover his own pension, but put in jeopardy the pensions of others. It is a disgraceful

state of affairs that no arrangement has been made by the two Governments concerned, before bringing this technical Bill forward, to see that justice is done to a man who served the Crown faithfully for 36 years, who was awarded the M.B.E. by the Sovereign, and was then driven out by a revolution which took place after we had conceded independence.
We raised this matter on Second Reading in the hope that the Minister would, between then and now, indicate that something would be done in this case. If the Tanzanian authorities, and not ourselves, are responsible, as I understand they are, for his pension, why have we not insisted that it be paid? We handed Zanzibar over to independence which was followed by brutal repression. Do not we have a moral duty to make some ad hoc provision for this unfortunate man and others like him? I hope that the Minister will give an assurance that the matter is being looked into and that a solution will be found.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Maurice Foley): To answer, first, the latter point raised by the hon. Member for Essex, South-East (Mr. Braine), about Mr. Alawi, I said on Second Reading—when the hon. Gentleman, the hon. Member for Chigwell (Mr. Biggs-Davison) and others mentioned unfortunate cases that had arisen as the result of a situation which was outside the control of those concerned and of which they were victims—that I would look into the matter.
I have today written to both hon. Members indicating that we are aware of this case. Her Majesty's Government have made representations to the Tanzanian Government, who have the responsibility in this matter. The Committee will appreciate that this is an issue primarily for my right hon. Friend the Minister of Overseas Development. I will ensure that his attention is drawn to the feelings which have been expressed again tonight on this matter.
I sympathise with the indignation expressed by the hon. Member for Chigwell in connection with the first case that he raised. I think that I met and knew the gentleman to whom he referred in the pre-independence days in Zanzibar. He will appreciate that this is primarily a matter for my right hon. Friend the Home Secretary. However, I will recall, for the


benefit of the Committee, some of the facts and something of the dilemma in which one is placed in this matter.
This gentleman came to Britain as a refugee after the revolution in January, 1964. He has resided here for the statutory qualifying period of residence of five years and has applied for registration as a United Kingdom citizen. If he is a British subject he is entitled to that registration. However, if he is an alien he does not enjoy this entitlement but must apply for naturalisation as a United Kingdom citizen, a matter which comes within the discretion of the Home Secretary.
11.15 p.m.
The present difficulty arises from Mr. Kharusi's inability so far to demonstrate to the satisfaction of the Home Office that he is a British subject. I repeat what I said on Second Reading. All people resident in Zanzibar were the sultan's subjects and at the time of Zanzibar's independence they became Zanzibari citizens. Zanzibari citizens at the time of the amalgamation and union were citizens of Zanzibar and exchanged that citizenship for citizenship of the United Republic. It is not clear whether Mr. Kharusi ever became a citizen of the United Republic. If he did not he is stateless and not entitled to registration and therefore we must proceed through the course of naturalisation. If he became a citizen of the United Republic and has been resident here he can go through the normal process of being registered after five years as a British subject.
What is in doubt is his exact status and he has been asked to furnish evidence of what his status is. If the hon. Member feels that any injustice is being done I will draw the attention of my right hon. Friend to this case and ask him to look at it again. I cannot forecast what his attitude will be, but the dilemma is clear. At the time of Zanzibar's independence, this gentleman became a Zanzibari citizen. Whether on the union of the two countries he became a citizen of the United Republic we do not know, nor whether his citizenship was taken from him in the post-revolution period. Until we can determine one or the other, we shall not know whether he should be registered as a British subject or be naturalised.

Mr. Braine: By definition surely he must have been a British-protected person before Zanzibar independence. If so, on independence, when he became a Zanzibari citizen, would he not have become a Commonwealth citizen? Why should there be difficulty about his status even if he was driven out by the revolution?

Mr. Foley: There is a distinction which is reflected in the Bill, between people who resided in Tanganyika and people who resided in Zanzibar. Those who resided in Tanganyika were British protected persons either by birth or relationship. Those who resided in Zanzibar were the subjects of the sultan; they were not British protected persons. At the time of Zanzibar's independence all the sultan's subjects became Zanzibar citizens. At the time of the revolution by a decree passed by the Revolutionary Council, certain people were deprived of this citizenship and were made stateless. The problem is to try to define in exactly what category this gentleman comes to determine whether we proceed on the path of naturalisation for an alien or registration as a British subject.

Mr. Biggs-Davison: I am grateful for the hon. Gentleman's sympathetic attitude towards this case. I and the Committee are also obliged for his statement of the legal dilemma, but he will appreciate knowing the subject we are discussing, which is probably unknown to the Home Office, what a shock must have been occasioned to this gentleman on receiving a letter of this kind and being directed to apply to the authorities there for certification as to his citizenship. I am much obliged to the hon. Gentleman for his sympathy with my indignation.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clauses 2 to 7 ordered to stand part of the Bill.

Clause 8

SHORT TITLE

Question proposed. That the Clause stand part of the Bill.

Mr. Braine: You will be relieved, Mr. Chairman, to hear that I do not intend to detain the Committee for more than a


moment or two. I have no comment to make on the Clause itself, but as we are not having a debate on Third Reading I wonder whether I may be permitted briefly to stretch the rules of order by saying that although we have made a number of critical points on Clause 1 this must not be taken in any way to indicate a lack of friendly feeling towards the people of Tanzania themselves and, in particular, to the remarkable man who presides over their State.
I say that because Julius Nyerere is known to many of us personally. We admire his courage and single-mindedness, and particularly his insistence that his people should achieve their economic and social goals by self-reliance. We wish his country well. We were pleased to hear from the Minister in the Second Reading debate that in recent months there has been a warming in the relations between our two countries. That was very good news. May the process continue.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Bill reported, without Amendment.

Motion made, and Question, That the Bill be now read the Third time. put forthwith pursuant to Standing Order No. 55 (Third Reading), and agreed to.

Bill accordingly read the Third time, and passed, without Amendment.

Orders of the Day — ROADS (CHAPEL-EN-LE-FRITH BYPASS)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]

11.22 p.m.

Mr. Peter M. Jackson: My hon. Friend will doubtless recall the reply that he gave to my Question on 10th March in connection with the priority which should be given to the Chapel-en-le-Frith bypass. He said:
I regret that I cannot say when we are likely to be able to accept the scheme for preparation."—[OFFICIAL REPORT, 10th March, 1969; Vol. 779, c. 958.]

In answer to a supplementary question, my hon. Friend said that it had to take its turn in the pool. My question tonight is: what turn will it take in the pool? The impression is gaining currency that the Chapel scheme is being bypassed. My hon. Friend should know that locally, his reply to me on 10th March last, generated both anger and incomprehension.
I want to set the scene very briefly. This scheme was first proposed as far back as 1934. It is said locally that but for the intervention of the Second World War the bypass would have been built many years ago. The road was trunked about 10 years ago. The scheme proposes to bypass several communities, and I will list them briefly. They are Chapel-en-le-Frith, Tunstead Milton, Whaley Bridge and, finally, Furness Vale. The scheme will affect an estimated population of 10,500.
When I tell my hon. Friend that the traffic surveys reveal that the bypassable traffic is estimated at about 71·4 per cent. he will realise the benefits which such a scheme would provide to the local communities. He should also know—I hope that his local officials have drawn his attention to it—the extent to which this section of the road is sub-standard.
First, the carriageway. In the centre of Chapel, with a population of about 5,000, at some points the carriageway is no more than 18 ft. 8 in. wide. At other points it is 21 ft. My hon. Friend will know of the traffic densities, and I am sure he will agree that ideally this should be a three-lane highway, yet we have a carriageway of no more than 18 ft. 8 in.
Then there are the pathways. I would inquire whether my hon. Friend is cognisant of all the facts. Does he realise that at certain points the pathway is no more than 1 ft. 11 in.? This compares with his Ministry's standard of 5 ft. in rural areas and 9 ft. in urban areas. I would ask my hon. Friend to consider the problem which many of my constituents are faced with every day when they go and collect their children from school.
I have made inquiries, and I am told that there are hardly any prams on the market which are under 2 ft. in width, so that mothers in my constituency are


required to traverse quite a long stretch of pathway which is not even the width of the pram.
I would also draw my hon. Friend's attention to the fact that there are two schools—a junior school and a primary school—which abut this road.
As my hon. Friend will know, there has been, over a period of years, a considerable loss of life and injury on this particular stretch of road. The figures for 1967 show that there were four fatal injuries, 14 serious injuries and 19 slight injuries.
I regret that there is no record of the loss of amenity caused by diesel fumes, or of the number of occasions when clothing has been damaged by projections from passing lorries, or when shopping baskets have been knocked out of shoppers' hands. I should also like to remind my hon. Friend of the sub-standard visibility on this section of the road, and that there are a number of sub-standard junctions.
I am sure that he will tell me, and, of course, I take the point, that he has no choice but to spend money where it is likely to show most benefit. But my hon. Friend must know that the first year rate of return on this road is 31 per cent., and that schemes are considered viable by his Department with a 15 per cent. rate of return. Therefore, the rate of return on this road is double that considered viable by his Department.
Why, then, has this scheme not been considered? Why is it given such low priority? I am advised by the county highway authority that certain schemes have been approved by his Department with a somewhat lower rate of return than 31 per cent. In preparing for this debate, I consulted the Road Research Laboratory's Technical Paper No. 75, Economic Assessment of Road Improvement Schemes. From this I learned, and I quote, that
it is not at present possible to allow quantitatively for changes in amenity.
The paper also says:
Therefore, in assessing the economic return from a road improvement the only benefits considered are those accruing directly to traffic.
That may be so, but the case on traffic grounds has been made out. I think the figure of 31 per cent. is stark and to the

point. If my hon. Friend tells me that 10,500 people do not matter, I can only put in a strong dissent. I think that the well-being and convenience of these people does matter, and that my hon. Friend should give very serious attention to that well-being and convenience.
I understand his problems, and having read the technical paper, I understand the techniques employed to determine the priorities given to road improvement schemes. My hon. Friend should pay attention to the well-being of so many constituents who would benefit from such a scheme. The economic case has been made out. I hope that the fact that the well-being of so many people is involved will tip the balance and that my hon. Friend will announce that priority is to be given to the scheme.

11.30 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown): My hon. Friend the Member for the High Peak (Mr. Peter M. Jackson) has vividly described the traffic problems of his constituents in Chapel-en-le-Frith and the nearby towns. He has also previously on a number of occasions drawn attention to the difficulties experienced on this section of the trunk road A.6.
I should like to make clear that the main function of this section is as part of a radial route of the South-East Lancashire and North-East Cheshire conurbation. The industrial traffic it carries derives mainly from the very large limestone and basalt quarries which the High Peak area contains.
It is one of the principal sources of roadstone and of limestone for the steel and chemical industries and of concrete aggregate for the densely populated industrial area of South Lancashire and North Cheshire. Much of the cement supply for this area comes from works in the Hope Valley and cement from this source to South Lancashire and other areas is almost wholly carried by road, via A.625 and A.6 through Chapel-en-le-Frith and Whaley Bridge.
In addition, supplies of coal from the North Midland Coalfield travel to South Lancashire by way of A.623 and A.6. The number of goods vehicles generally has certainly increased in recent years.


As well as this industrial traffic, muting and general business traffic and there is also a considerable amount of holiday traffic as this is the main route between the industrial North West and the Peak Park.
The A.6 through Chapel-en-le-Frith and Whaley Bridge was not designed to take industrial traffic or its present quantity of traffic at all. As we know, and as has been described by my hon. Friend, most of it is narrow, with sharp curves and, of course, gradients which add to the difficulties and where the road runs through the shopping areas the carriageway is in places less than 20 ft. wide and the footpaths are indeed very narrow.
My hon. Friend referred to the difficulties of mothers with prams. This clearly causes frustration and difficulty for local people, but as regards accidents I must refer to my hon. Friend's statement in a supplementary question on 10th March that there had been five fatalities on this length of road in the previous six months. I am thankful to be able to say that the fatal accident rate was much less than this. In 1967 there were four fatalities, in 1968, one, and so far this year there has also been one. I sincerely hope there will be no more in the remaining part of this year.
It has been suggested that traffic through Chapel-en-le-Frith has increased as a result of the construction of the M.6 and M.1. There is, however, little evidence of this and in any case the completion of the Midlands link motorway between Birmingham and the M.1 will provide a much more attractive alternative route.
It is true that a bypass of Chapel-en-le-Frith has been proposed and considered on a number of occasions, but it is not the case, as my hon. Friend has claimed, that but for the Second World War a byass would have been built by 1939.

Mr. Peter M. Jackson: May I qualify that. I understand from the county surveyor that the scheme was being considered for the pool in 1939.

Mr. Brown: This is true. A line for a bypass was suggested in the early 1930s, but no detailed design work had been done on it.
Possible solutions to the traffic problems in this area have been given and are at present receiving careful examination. The position in and around Chapel-en-le-Frith has to be looked at from two angles. First, the case for a bypass of Chapel-en-le-Frith and Whaley Bridge has to be weighed against the claims for road improvements from other parts of the country. Resources, unfortunately, are not unlimited and this bypass has simply not achieved a high enough priority in competition with other proposed schemes. As my hon. Friend knows, we have re-examined its case at intervals. The result, I am sorry to say, remains the same.
My hon. Friend has suggested that the economic rate of return of a bypass would be about 31 per cent. That, as he said, is a high figure. But it has only recently been put to my Department and the basis on which it has been calculated will be examined. I can, however, say that our first reaction, based on all the information already available to us, is that it looks unlikely to be acceptable for our purposes. It is, I understand, based on a traffic count taken in 1967, not on the comprehensive information available to us from the 1965 national traffic census.
So its comparability with the figures generally used for the determination of our priorities may well be doubtful. It also apparently fails to allow for the traffic that would be diverted on to the comprehensively improved routes that we envisage between Sheffield and Manchester or Stoke and Derby, which I shall mention in more detail in a moment.
Similarly, the figure of 71.4 per cent. which my hon. Friend quoted for the volume of traffic which might wish to use the bypass instead of going through Chapel-en-le-Frith cannot be accepted without examination. An up-to-date indication of the 1969 traffic pattern in this area will become available from the national census starting in August this year. Four census points in the vicinity of Chapel-en-le-Frith and Whaley Bridge will be included.
I should also make it clear that the economic rate of return is by no means the only factor to be taken into account in assessing road priorities. A very important factor in this case is that the route goes through the Peak District National


Park. The effect of any individual road scheme on the rest of the National Park must be taken into consideration before we reach firm decisions. This is the other angle from which a Chapel-en-le-Frith bypass must be considered.
In April, 1968, the then Minister announced details of a number of project feasibility studies which, she said, might produce schemes costing over £200 million for inclusion in the trunk road preparation pool. Such studies were required on areas where traffic movements were so complex that detailed surveys were needed to identify likely solutions.
One of the major studies announced was designed to examine trans-Pennine link routes south of the line of the M.62. It was accepted that all east-west routes across the Pennines south of the M.62 were in urgent need of improvement or relief. The trans-Pennine feasibility study aimed to investigate what relief could be given to the various roads through the Peak District National Park by the construction of high standard routes north and south of the Park—that is between Sheffield and Manchester and between Derby and Stoke.
That section of the study examining possible routes between Sheffield and Manchester is now being carried out by the divisional road engineer in Leeds with the West Riding County Council as agent authority. The study will determine which schemes are practicable and which appear to offer the best value for money. Local authorities are being closely consulted and their views will be taken into account when recommendations are being made to the Minister. Valuable information was collected on an earlier study of trans-Pennine traffic movements carried out under the agency of the West Riding County Council.
The study is complex, but a final report is expected around the end of the year. When it has been examined, the Minister will decide what particular scheme should be added to his preparation pool. The scheme will then be developed through the various design stages to a point at which its relative cost and benefits can be more accurately assessed with a view to its inclusion in the firm road programme. The choice of year in which work will finally start will

depend on the financial situation at the time and the priority which the scheme merits in competition with others throughout the country which have reached an equivalent stage of preparation.
It is too early at present for me to express any opinion on the possible effect of the study on the roads of the Peak District, but since the object of the survey is to relieve, as far as possible, congestion on the east-west routes through the Park—in other words, to attract traffic, particularly heavy traffic, away from the Park—while it is unlikely to produce a recommendation for the wholesale improvement of any routes within the boundaries of the Park, such as the roads leading to and through Chapel-en-le-Frith, its recommendations should certainly result in relief for those roads.
We are, therefore, by no means oblivious to the needs of the Peak District's towns and villages, nor are we unmindful of the difficulties which now exist in the streets of these communities. But we think it right to deal with the problem by reducing traffic flows as far as this is feasible, instead of undertaking costly improvements which might well attract further traffic into the area and so defeat our aim.
As evidence of our concern, I should like to draw attention to the fact that in the brief which has been provided for those carrying out the project feasibility study we have specifically asked that attention be given to assessing the degree of relief from traffic congestion and the size of the residual traffic flow on the A.623—the Baslow-Chapel-en-le-Frith road, and on the A.625—the Sheffield-Chapel-en-le-Frith road. This request has been made because of the existing volume of traffic using these routes—a volume which we hope to see considerably reduced by the new Sheffield-Manchester link.
We can certainly expect the feasibility study report to indicate what the effect of the construction of this new link will be and to provide any guidance that may be necessary on what ought to be done to provide for the flows which will continue to use these principal roads and the A.6 through Chapel-en-le-Frith.
The north-south trunk route through Chapel-en-le-Frith has not been identified as a strategic inter-urban route proposed for comprehensive improvement in


the Minister's recent Green Paper "Roads for the Future". This does not mean however that there is no prospect of improvements ultimately being carried out at Chapel-en-le-Frith, either in the shape of a bypass or some other appropriate scheme.
As the Green Paper points out, around one-quarter of the money spent on trunk roads in future will continue to be invested in individual improvements to trunk roads other than those identified as major inter-urban links. In money terms this represents the spending of an estimated £600 million on non-strategy trunk routes during the period to which the Green Paper relates—a period which cannot be exactly defined, but which will extend into the early 1980s.
In the meantime, we intend to carry out local improvements and traffic management measures on the existing road. We have in mind the construction of an overtaking length of road west of Tunstead Milton at an estimated cost of £90,000 and the improvement of the junction at Horwich End, Whaley Bridge. The waiting restriction brought into force in Chapel-en-le-Frith about six months ago, although it aroused local objections, has lessened congestion there.
My hon. Friend asks for an indication that we will be altering priorities. I have demonstrated that although I can-

not give such an indication we will take cognisance of what he has said. Certainly, I am not saying that 10,500 people do not matter; far from it. We give consideration to all that has been said and, as and when we can find a place in the programme for this project, we will.

Mr. Peter M. Jackson: Before my hon. Friend sits down, would he mind answering one simple question? I gather that he has questioned the basis of the inquiry undertaken by Derbyshire County Council, indicating that there is a 31 per cent. rate of return. I think that the cost of the O & D census was £500. Would he sanction the expenditure of that sort of sum on an inquiry to satisfy him statistically and establish the real economic rate of return?

Mr. Brown: I have said already to my hon. Friend that the figures which my Department has had put to it recently will now be checked against the figures which we got in the 1965 traffic census. When the new relationship is known, certainly if we learn anything further, I shall write to him.

Question put and agreed to.

Adjourned accordingly at a quarter to Twelve o'clock.

Orders of the Day — Second Reading Committee

Tuesday, 17th June, 1969

[SIR BERESFORD CRADDOCK in the Chair]

The Committee consisted of the following Members:


Sir Beresford Craddock (in the Chair)


Armstrong, Mr. Ernest (Durham, North-west)
Macmillan, Mr. Maurice (Farnham)



Millan, Mr. Bruce (Under-Secretary of State for Scotland)


Barnes, Mr. Michael (Brentford and Chiswick)




Pavitt, Mr. Laurence (Willesden, West)


Boardman, Mr. H. (Leigh)
Rowlands, Mr. E. (Cardiff, North)


Dean, Mr. Paul (Somerset, North)
Royle, Mr. Anthony (Richmond, Surrey)


Dunn, Mr. James A. (Liverpool, Kirkdale)
Shaw, Mr. Arnold (Ilford, South)



Snow, Mr. Julian (Under-Secretary of State for Health and Social Security)


Edelman, Mr. Maurice (Coventry, North)



Harrison, Mr. Brian (Maldon)
Tapsell, Mr. Peter (Horncastle)


Iremonger, Mr. T. L. (Ilford, North)
Ward, Dame Irene (Tynemouth)


Jones, Mr. J. Idwal (Wrexham)
Worsley, Mr. Marcus (Chelsea)


Knight, Mrs. Jill (Birmingham, Edgbaston)




Mr. G. Cubie, Committee Clerk.

Orders of the Day — NURSES BILL [Lords]

10.30 a.m.

Mrs. Jill Knight: On a point of order, Sir Beresford. Although I know that it is no fault of the Minister, who is invariably most courteous, I should like to make a small protest about the shortness of time which has been available to us to prepare for the Bill. I knew only on Friday, by a pure fluke, that this Committee would sit this morning and, as I had to be away from London yesterday, I had virtually no time to contact members of the nursing profession. I feel that more time should be made available to members of the Committee to prepare themselves for discussing the Bill.

The Chairman: As the hon. Lady knows, these matters go through the usual channels. Notice of the Committee was given on Wednesday of last week.

The Under-Secretary of State for the Department of Health and Social Security (Mr. Julian Snow): I beg to move, That the Chairman do now report

to the House that the Committee recommend that the Nurses Bill [Lords] ought to be read a Second time.
This Bill is being introduced at the request of the General Nursing Council for England and Wales and the General Nursing Council for Scotland after full consultation with all parties—or, perhaps, in view of the remarks of the hon. Lady, I should say with all interested bodies. It has already received approval in the House of Lords after a few minor amendments.
The main purpose of the Bill is to revise the constitutions of the two Councils so as to streamline administrative processes. The Councils have a number of standing committees, and they also each have two separate statutory committees which deal with matters concerning psychiatric nurses and enrolled nurses. It is generally considered that these two separate statutory committees are no longer necessary. The Bill provides that the statutory Enrolled Nurses Committee


will be abolished and, for the first time, enrolled nurses will be elected to the Council itself. The statutory Mental Nurses Committee will become one of the Council's statutory standing committees. The increase in the number of mental nurses to be elected to the Council will remove the need for the separate election of two such nurses to the new statutory standing Mental Nurses Committee. These changes result in an increase in the size of the Council. The opportunity has been taken to include also one or two other minor amendments.
The two General Nursing Councils are statutory bodies charged with the responsibility for standards of training, for standards of registration and enrolment and for the discipline of nurses. The Council's powers are defined in the Nurses Act, 1957, the Nurses (Scotland) Act, 1951 and subsequent amending Acts. Matters related to pay and conditions of service do not come within the province of the Councils and would not be relevant matters for this Bill.
Clause 1 provides, for the General Nursing Council for England and Wales, a new part of the register for nurses trained in the nursing and care of the mentally subnormal. At present the names of these nurses are recorded in a separate section of the part of the register for nurses trained in the nursing and care of persons suffering from mental disorder. Because the Bill provides that, in future, mental subnormality nurses will be separately elected to the Council, these nurses have for the first time to be defined in the Nurses Acts, and the opportunity has been taken to recognise their separate training by putting them on a separate part of the register. It seems especially important, in view of recent events, that the value of mental subnormality nurses should receive full recognition.
Clause 1 also provides that the Roll of Nurses maintained by the General Nursing Council for England and Wales should be divided into separate parts for nurses trained in the general, mental and mental subnormality fields. At present the Roll is not divided, and a nurse who has trained in one field and wishes to move to another is not able to obtain a second qualification to recognise her additional training.
Clause 2 increases the number of elected and appointed members of the Council for England and Wales. The present Council has 36 members; 18 elected and 18 appointed. The new Council will have 42 members. Because the Statutory Enrolled Nurses Committee is to be abolished and its work taken over by standing committees of the Council, the Bill provides for the first time for enrolled nurses to be elected to the Council. Also, because the Mental Nurses Committee is to become a standing committee of the Council, so that there will no longer be a separate election of psychiatric nurses to the committee, the number of psychiatric nurses elected to the Council is to be increased.
The number of appointed members of Council is also to be increased to recognise developments in nurse training and the increase in the emphasis on community nursing. There are also four unspecified appointments to be made by the Secretary of State, which can be used, if necessary, to make up any type of relevant experience not provided by the elected members.
Clause 3 deals with similar changes in the constitution of the General Nursing Council for Scotland. The changes are more limited than those for England and Wales because the Scottish Council is smaller, but the pattern is the same, in that there is an increase in the number of elected psychiatric nurses and, for the first time, two enrolled nurses will be elected. The number of members appointed by the Secretary of State for Scotland is to be increased by one.
Clause 4 changes the status of the Mental Nurses Committees of the two Councils so that they now become statutory standing committees of the Councils. This will remove the necessity for separate elections to these committees. The functions of the committees will remain the same as at present with the addition, in England and Wales, of responsibility for pupil and enrolled psychiatric nurses. The increase in the number of elected psychiatric nurses should ensure that there is an adequate width of experience on the committees but, as a safeguard, provision has been made for the Secretary of State to nominate up to four additional members for


appointment by the Council to the committees in each case.
Clause 5 abolishes the Enrolled Nurses Committees of the two Councils. The importance of the enrolled nurses is recognised by their election for the first time to the Council, and there is no longer any need to make special arrangements to protect their status. The current trend is towards combined training schools, training both student nurses and pupil nurses, and it is felt that the educational function of the Enrolled Nurses Committees can be more effectively fulfilled by the Council's standing Education Committee and the statutory standing Mental Nurses Committee, both of which will in future include representatives of enrolled nurses. The present disciplinary function of the Enrolled Nurses Committee will pass to the Disciplinary Committee, thus avoiding the possible embarrassment of a double hearing when a case concerns a nurse who has the dual qualification of registered and enrolled nurse.
The remaining provisions of the Bill are concerned with rectifying a few minor anomalies in the Nurses Acts. Every time a change in the rate of payments is made to members of area or regional nurse-training committees for loss of earnings or for additional expenses, the Secretary of State is required to lay a Statutory Instrument. Clause 6 removes this requirement, and allows the Secretary of State, with the approval of the Minister for the Civil Service, to determine any alteration in the rates payable. This merely removes the requirement to lay a Statutory Instrument, and will not lead to any increase in the frequency of change or to any increase in expenditure.
Clause 7 will allow the Councils to introduce two new fees. The first will be charged to all student nurses and pupil nurses when they commence training, so that they will all now contribute towards the administrative expenses of the Council. At present, only those who sit the Councils' examinations and who apply to be registered or enrolled make any contribution to the Councils' costs, and I think that it is reasonable that those who complete their course should not be expected to subsidise those who do not.
The second fee will be charged to nurses trained overseas who apply to either of the Councils for registration. At present only those nurses whose applica- 
tions are accepted are required to pay a fee, although the Councils are involved in considerable expense in checking the details of those who are ultimately not successful. This new fee will ensure that the cost of checking the details is spread evenly amongst all those who apply for registration.
Finally, Clause 8 removes from the Councils the obligation to publish periodic lists of nurses whose names have been added to, removed from or restored to the register, the roll or the list. The list is a residual provision which was established prior to the institution of the conventional registers as they are now established by law. These lists have little value, and are wasteful of both time and money. Up-to-date lists will be available for inspection at the Councils' offices, which will still be able to publish the information if for some unforeseeable reason the need should arise in the future.
As I mentioned previously, the Bill has been proposed in its essence by the professional bodies, and is mainly concerned with amending the constitutions of the two General Nursing Councils. The election of nurses to the Councils is due to take place next year and, as the necessary preliminaries must start towards the end of this year, it is essential that the Bill should be enacted soon if the elections are to take place under the revised constitutions. Any delay will either involve the Councils in the expense of an additional set of elections or the introduction of the new constitutions will have to be postponed for five years until the next set of elections takes place.

Mr. Maurice Macmillan: I think, Sir Beresford, that all members of the Committee will support the Motion and welcome the Bill, not least because it is being put forward at the request and with the approval of the representatives of the nursing profession. We certainly welcome its intent, but some of us on both sides may have a few reservations about the methods being used to carry out that intent which we shall be able to develop at a later stage.
In another place, the Baroness Summerskill referred to this as an innocuous little Bill. Those of us who have dealt with medical and similar Bills in the past realise that too often an innocuous little Bill has what might be called a concealed sting in it, rather like


the greenfly on the rose or the scorpion in the toe of a shoe and, if only in exercising our duties in Opposition as guardians in matters of this sort, we shall be probing to make sure that the Measure is the best that we can make it. That after all, is the prime duty of Parliament.
As has been said, the Bill is concerned primarily with the enrolment and registration of mental nurses and nurses for the subnormal. It does other things as well. But its main change is to enhance the status and to improve the recognition of nursing in this sphere.
I wonder how much real difference it will make. Will there be any great improvement in the terms of service and reward for those on whom the community relies for work which is always hard and demanding, frequently unpleasant, and sometimes very difficult indeed?
10.45 a.m.
It is relevant to ask, as was asked in another place, just what the Bill does to facilitate recruitment so as to make sure that we are getting the young men and women coming forward which the profession needs. Just what do these provisions or changes do? How will the Bill enable the General Nursing Council to help us get rid of our present dependence and reliance on nurses—as, alas, on hospital doctors—from countries which need their services almost as desperately? Admirable in many ways as it is, as far as it goes the Bill does very little towards helping to solve the major problem facing the nursing profession. Perhaps in this light it could be regarded as an opportunity missed. I hope—in fact, I expect—that my hon. Friend the Member for Tynemouth (Dame Irene Ward) will have something to say on this aspect.
Despite improvements of this nature made by a Bill, despite the tidying up of administrative difficulties for removing anomalies and improving representation, and so on, we still cannot hope to get a health and hospital service on the cheap. Organisation and administrative improvements are no substitute for enough money.
Again, in another place, Baroness Summerskill quoted from the Nursing Times in illustration of the difficulties under which the nursing profession now works. I am loth to follow her example

in great detail. Were I to do so, I should have to declare an interest as publisher of that admirable paper. But I should like the Minister, in his winding up speech, to say what the Bill will do for the representation of student nurses and the discussion of their problems. Everyone now admits that they are neither one thing nor the other. They are treated in their work and conditions of work as fully employed persons. They are taxed as such, and they pay for their food as such. In essence, as students they are paid an allowance. Yet in some ways they are treated as employees. Does the Bill help in any way the discussion of these problems? Does it help them to put forward their case?
For example, how does the Bill deal with the admitted problem of the salary structure of the nursing profession? The concertina between the very bottom and and the top has got so far closed up that at other levels there are anomalies and difficulties. Does the Bill assist the problem of the salaries at the top end of the profession and their effect on organisation? I am not suggesting that the General Nursing Council should usurp the functions of the negotiating bodies, but the decisions of the negotiating bodies have a considerable effect on the structure, training, organisation and work of the nursing profession in relation to patients. Does the Bill help in the discussion for dealing with these problems? It is a curious anomaly that if we relied on the harsh solution of the market, we should be forced to pay our nurses properly. The planning and prices and incomes policy shows, in this context, that it pays to strike: but nurses cannot.
Does the Bill help the discussion on the organisation side by any positive ideas for improving the quality of the service that nurses are allowed to give to the public by assessing what aid can be given to them, especially in the care of the mental and subnormal, by improving physical facilities and an examination of the extent to which disposables can take a lot of the heavy physical burden out of cleaning up?
The Minister referred to the second qualification. Is it the intention to use the provisions of the Bill to develop and encourage second qualifications, so that we can have a certain amount of what


might be called "cross-posting" to enable nurses engaged in the heavier and more unpleasant side of the care of the mentally subnormal to do periods in less arduous tasks, and be replaced by reliefs from among equally well qualified nurses who normally work in a slightly different sphere?
A Bill of this nature could have done a lot to shed light on the future. But neither it nor the debates that I have read in another place, nor indeed the Minister's speech, give us any indication of these matters.
Both mental nurses and nurses for the mentally subnormal are to be represented on the Council—both those registered and those enrolled—so that, in all, there are four representatives from this sphere on the Council. This enables the statutory committee to be replaced by a standing committee of the General Nursing Council. Direct representation on the Council logically leads to this abolition of the statutory committee with separate election and replacement by a standing committee of the Council. We shall wish to probe a little more deeply whether this means that mental nurses and nurses for the mentally subnormal will have a reasonable degree of control and say over their own affairs; and the possibilities of any recommendations made by their own committee, as it were, being overruled because its members are in a considerable minority on the main Council. In theory at least, the change-over means that the interests of mental nurses generally, because they no longer have a statutory body of their own, could be swamped by a majority on the General Nursing Council. This may be a small point, but we shall wish to receive reassurances on it.
My second point concerns the standing and position of enrolled nurses. Although there is only one representative of general enrolled nurses on the General Nursing Council, plus two representatives of enrolled nurses on the mental and subnormal side, their committee is not replaced, curiously enough, by a standing committee of the General Nursing Council, but is abolished altogether.
I do not see the logic of this. Mental nurses and nurses for the mentally subnormal are given greatly enhanced representation on the Council. In return they have given up their own statutory com-

mittee, but they have kept a standing committee of the Council. Enrolled nurses who, at first sight, appear to have given up rather more, do not have any sub-committee or standing committee of their own, but are represented entirely through one representative on the Council.
We must ask the Minister to explain this position, and we may even ask him later to reconsider it. It seems, first, illogical. Secondly, it seems slightly inconsistent with the desire expressed by everyone concerned to enhance the standing and status of the enrolled nurse, to go about it in detail in this fashion. There are ways of getting round the difficulty. Perhaps we might reconsider the question of a standing committee or a sub-committee of the Council, or give the enrolled nurses a vote for the general members of the Council. What the Minister said about education indicates that this might be a matter of considerable significance in future.
My third minor point concerns titling. If we are dealing with the status, standing and labelling of mental nurses and nurses for the subnormal, it is sensible to follow the logical Scottish pattern and keep the title the same in each case; in other words, to talk about a registered general nurse and a registered enrolled nurse as well as a registered subnormal nurse. As it is, the wording is different for the general and for the specialist. It is a small point, but it is worth taking the opportunity given in the Bill to get consistency in description.
Perhaps the Minister could answer why the words "and care" are added only in the case of mental and mentally subnormal nursing. Surely all nursing is nursing and care. It seems odd to specify it for these particular categories. It is almost as though there were still som kind of non-expert element left. If this is a sort of remnant of what one might call pure institutional care of the warder type, a hangover from the distant past, it might be eliminated.
My fourth relatively minor point, which we intend to raise later, concerns the registration fee for student nurses. It seems odd to pay a registration fee before being registered. Either it is a fee or a registration fee. Registration


should be conditional on registry. But, again, that is a matter which we can discuss in Committee.
No doubt my hon. Friends and other right hon. and hon. Gentlemen will have further points to develop in detail at a later stage. However, I hope that the Minister now can reassure us that the timing of the Bill and the date that it is to come into force, will allow ample opportunity for its provisions to be assimilated and preparations to be made on the new system for the 1970 election to the Council. I understand that there is some doubt whether there is time enough.
I wish that I could hope that the General Nursing Council was in a better position, because of the Bill, to develop the profession, to help move it towards modernisation, and to improve some of the difficulties and anomalies that the profession is up against. If the Minister can reassure us about that, so much the better. If not, we will still support the Bill, if it should be given a Second Reading, though with perhaps a sigh in our hearts at what we would have liked to have seen in it but what we fear may have been left out.

11.0 a.m.

Mr. Laurence Pavitt: The hon. Member for Farnham (Mr. Maurice Macmillan) has been very successful in widening discussion of what is an extremely narrow bill. I must try, Sir Beresford, not to presume on you too much, but perhaps I might be permitted a small comment at the outset.
This is the first Second Reading Committee on which I have had the privilege of sitting. I have done some research on the number of Standing Committees on which I have served over the last ten years—and it is a large number. I am pleased to see here so many "old faithfuls" who always serve on Standing Committees. We have been on many previous Committees together. The Bill is concerned with professional status. I should like to see some similar recognition for hon. Members who are professionals in this place and who do twice as much work as many of their colleagues, but only get half their pay.
The Bill is narrow, but the hon. Member is right when he says that in dealing

with basic registration and professional standards, the way in which it is done, the organisation and administration, all have a bearing on a lot of the other questions which arise from it. Before giving the Bill a Second Reading it is right to look at its fringes to see whether it enhances the kind of propositions that the hon. Gentleman has been putting forward.
We shall have an opportunity of detailed discussion in Committee and of probing a number of these things more completely. Like the hon. Gentleman, I picked up the comment in another place about this being an innocuous Bill and immediately thought of the effect it will have, and on how many people. For every two nurses who were available and who would have been affected by this Bill in 1948, we now have three. We now have 188,888 whole-time nurses and 79,235 part-time nurses. Therefore, although this is an innocuous Bill it affects an important sector of the community—in spite of the fact that we have shortages in most spheres which we would like to remedy.
One problem the Bill seeks to deal with is not so much the recruitment, enrolling and registration, but the standards and organisation controlling registration which help to eliminate wastage. This is the basic problem: not so much attracting nurses but, having attracted them, retaining them and ensuring that they go through to registration. That is supremely important.
There are details which we can discuss later, but running throughout the Bill is the question of the way in which we will cater for the increasingly large number of nurses dealing with psychiatry and with mental subnormality. Whether or not it is a product of our times, there is no doubt that we have witnessed in health during my period of interest in the subject, a trend away from infective diseases and more and more to stresses and tensions. It is important that we should get this right in the Bill, and are able to distinguish between psychiatric nurses and those with what is, in many ways the heavier, responsibility of dealing with mental subnormality.
I ask the Parliamentary Secretary to tell us why male nurses, working mostly in mental nursing, seem to have been left out of the Bill. From time to time


I have claimed to share the views of the suffragettes on many issues, and, all these years after Emily Pankhurst, I think that women still do not get a square deal in the Health Service. In this case, however, I don my other hat and try to do my best for the male section of the profession.
This is primarily a female specialty, but there is a male section, and anyone who knows anything about mental hospitals is aware that we are not getting sufficient numbers of nurses even only from the security point of view. I was able to show the House recently what was happening in a mental hospital in the constituency of the hon. Member for Ilford, North (Mr. Iremonger), where a male nurse was having to work for 15 to 16 hours, more or less on his own, in a locked ward. There is an acute need for professionalism in this area, because only by keeping an eye on what is developing is one able to forestall possible disturbance and difficulties. Therefore, the way in which the registration of male nurses is completed and the amount of participation they have in the Committees established under this Bill are extremely important.
Equally important is the question of pay. In North Ilford, a male nurse after he has completed his training is in the lower range of pay packets, but he can go two miles to Fords and earn double. This creates a difficulty in getting the number of nurses one needs in this specialty. These two things are bound up. Unless one is able to get participation and enhancement of status of male nurses in mental and subnormal hospital nursing, we are likely to have further difficulties as the discrepancy between the pay packet of the male nurse and of people in industry and commerce increases.
There is the question of whether or not one should pay a fee at the outset of one's training or only at the end. A number of nurses start the course and do not finish it, and I do not like the idea of paying at the outset—nor at the end. It seems a little like economic nonsense that these nurses should come to the preliminary training schools, have three years of training for registration and a shorter period for enrolment, which costs the State much more than the negligible fees

paid at the end of the training and then, after the hard slog, suddenly to be faced with a bill for so many guineas. This fee is neither here nor there. It is one fringe benefit we could give the hard worked profession: not to have to pay fees at the beginning or at the end of the course. It is a small amount, and although the Treasury nibbles off candle ends I do not see why the candle ends of the nursing profession should be taken for the Department of Health.
I am not happy about the way we are dealing in the Bill with the question of status, but we can come to it in Standing Committee. There should be recognition of increased status for State registration. That has been done, but the Nursing Council has established standards and sizes of hospitals for the training of enrolled nurses which tend to make matrons feel that if they get only enrolled nurses for training they are second-class while training for registration is for first-class nurses. This has an effect on recruitment, because while enrolment is different in kind it is not necessarily different in quality. Because of the service given by enrolled nurses, the hospitals would be in a sorry state without them.
I welcome those parts of the Bill which give enrolled nurses more status in the profession, but I would like to see more emphasis in the General Council and elsewhere on avoiding the first-class and second-class approach, and on the fact that if they are different in training and kind they are not different in quality, and in the value and esteem in which they are held.
By this Bill we are having a complete shake-up. It does an important job on registration, but at the same time we are having the implementation of the Salmon Report, and the P.I.B. implementations and changes in the way in which nursing is being organised, apart from the Salmon Report. This is part of a much wider structure, and I ask the Parliamentary Secretary to seek time for a debate in the House on the wider subject of nurses and the way in which changes are being made. The House of Commons should consider the separate parts of the problem and the whole problem. We will have changes in the next few years, and it is vital at the outset for the House to have this opportunity.
It is right that there should be an attempt to streamline procedure. The reorganisation of Committees in the Council, as put forward in the Bill, is, broadly speaking, right, but I, like the hon. Lady for Birmingham, Edgbaston (Mrs. Knight) would like more consultation about details. Hon. Members cannot be expected to have a wide knowledge of details on many subjects, and when we talk about the numbers serving and the way sub-committees are to be organised, we would like to be able to seek advice from the people affected.
It is essential that the trade unions should be called in more. It is true that the negotiating machinery for nurses does not specifically recognise the Confederation of Health Service Employees, N.U.P.E., or N.A.L.G.O. All unions have a part to play in the conditions and registration which flow from this Bill. If we ever get to discussing how the Bill affects the community, recognition, participation and consultation should not only be canalised through organisations which tend to be establishment-minded. We need the wider concept.
I welcome the Bill as a step in the right direction. I regret that it had to come to us from the other place, rather than starting in this House, and that we have to find from the other place Ministers interested in specialties, although the Minister of State is a first-class Minister who will do a good job. I hope that we can make the Bill even better before it goes on the Statute Book.

11.15 a.m.

Dame Irene Ward: I am delighted to add my qualified support to the Bill, and I echo with emphasis the points made by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan). If I may be excused for saying so, the Minister took a great deal of trouble to describe all the details of the various Clauses and Schedules but he did not give any really cogent reasons for the alterations nor explain why they were necessary. Although I agree about the shortage of time, one is able to read Clauses, and if one has tried to take an interest in the nursing profession over a number of years one has a general understanding of what is required and what the profession does.
Although I fully realise that it is a Bill which has been put forward by the General Nursing Council, it includes a lot of fairly substantial alterations to the organisation, and it would be more helpful to hon. Members, who are all deeply interested in the profession, if we could have in much more detail the reasons for the Bill. I hope that the Minister will be able to answer some of my hon. Friend's points.
I should also like to put on record the information that I have received from the Royal College of Nursing and from the General Nursing Council, that quite a number of Amendments which were put forward in another place were piloted through, if I may put it in that way, by Baroness Brooke of Ystradfellte. The nursing profession, and, indeed, all of us, are lucky to have Baroness Brooke in another place, with her wide knowledge of the profession and the great interest that she takes in it. The Minister kept saying that such Amendments as there were, were few and unsubstantial. He did not use the word "unsubstantial", but he suggested that only a few rather insignificant Amendments were put forward. As the Bill emanated from the General Nursing Council, it seems a little odd that it did not embody all the points which the General Nursing Council thought were necessary.

Mr. Snow: In regard to the point about the proposals put forward by the General Nursing Council, I do need to assure the hon. Lady that we have worked closely with the General Nursing Council on this Bill. However, she would not expect us merely to rubber stamp what was put forward by an outside body, however distinguished. The modifications that we have suggested are relatively minor.

Dame Irene Ward: That may well be so. The Minister opened by saying that in the main, this Bill was put forward at the request of the General Nursing Council. I am glad about that, and I am glad to hear that the Government have found time for the Bill. I could think of a lot of Bills which we would like to see put forward, and I am delighted that on this occasion the Government have accepted a Bill from the General Nursing Council, because it affects a profession in which we all take a great interest.
What I am saying is that with a Bill emanating from the General Nursing Council, in the main I would prefer the Council's views to the views of the Minister, because I am not at all satisfied, as has been pointed out in a realistic speech by my hon. Friend, that the views put forward by the Ministry are necessarily those held by the General Nursing Council. I never have liked the National Whitley Council system, by which the Minister gets up in the House and says one thing, and then instructs the management committee, behind the scenes, in a different way. We must be careful. I am not 100 per cent. behind the Ministry. I should like to have a lot of "digs" at them, but it is difficult to do this because, as was pointed out by the hon. Member for Willesden, West (Mr. Pavitt) we do not get many opportunities for debating this question.
I had the great honour of being the President of the State Enrolled Nurses for three years, and I also had the privilege and pleasure of piloting through the House of Commons the Bill which, at the request of the State Enrolled Nurses, altered their previous title of "Assistant Nurse" to that of "State Enrolled Nurse". Therefore, quite naturally, I have a great interest in their position, and I also feel a little unhappy because the Minister did not explain why he made the differentiation in the set up of the General Nursing Council with regard to the psychiatric and mental nurses and the position of the State Enrolled Nurses. I do not know whether the State Enrolled Nurses as such have sufficient representation on the General Nursing Council and I believe it is most important that we should get this straight, particularly in regard to voting powers.
Will the Minister please tell us whether there has been direct consultation with the various sections of the nursing profession with regard to this Bill? Have the State Enrolled Nurses been brought into the picture and consulted? Are their views, whatever they may be, embodied in this Bill? When we come to the Committee stage we shall be taking a great step forward, and I want to be certain that, as a professional organisation, they have had the opportunity of putting their views to the Minister.
I would also like to know whether the Minister can give the relative figures in

the various sections. How many State Enrolled Nurses and how many psychiatric nurses are there? I am glad that on both sides of this Committee there is a great interest in the detail of the Bill, because this is not a political matter at all. Those of us who endeavour to speak for the nursing profession want to be quite certain that the Measure will meet the needs of the nursing profession.
The Minister said that no one would expect the Ministry to "rubber stamp" a Bill put forward by the General Nursing Council. If I accept that, I then want to know whether all the points which the General Nursing Council wanted embodied in the Bill have been accepted by the Minister, or whether some have been rejected. In other words, there is a great deal more information which should be made available to this Committee so that when we discuss the detail of the Bill we may decide what is essential and right for the nursing profession on evidence rather than on what the Minister thinks is right.
It would be helpful if the Minister could give a little more detail as to why this new set up is acceptable to him, and the reasons which have contributed to the General Nursing Council putting forward this Bill. I am glad to be able to support the Bill, but I hope the Minister will be a little more forthcoming, and not expect us to accept that everything his Department says is really in the interests of the nursing profession. I have had too much experience to accept that idea without a good deal more probing.

Mr. James A. Dunn: I, too, welcome the provisions contained in this Bill but, like others, I have several reservations. One of the primary reservations is in regard to the statutory committee which now exists to represent Enrolled Nurses. By Clause 2(2)(a) and (b), this committee will be replaced by one single representative.
I am also concerned about the method by which elections are to be held for the representatives of the various categories and registrations of nurses. This has not yet been mentioned this morning and it is not clearly defined in the Bill. Perhaps I may be forgiven for saying that I always approach anything in legislation which is not clearly explained, with a certain amount of suspicion. I feel that my hon. Friend the Under-Secretary


could well look at this point again. Perhaps he has the necessary information to satisfy the Committee, and, in particular to satisfy me, this morning, but until such time as I receive an explanation I shall view this Bill with grave suspicion.
Like my hon. Friend the Member for Willesden, West (Mr. Pavitt), I have reservations about the registration fees, and I appeal to my hon. Friend the Under-Secretary to look at them again. The sum involved is infinitesimal. I also subscribe in part to the statement made by the hon. Member for Farnham (Mr. Maurice Macmillan) that the nursing profession in general is not given adequate remuneration or reward, but I should be in great difficulty if I attempted to deal with that question now. There is an opportunity here for a compromise. An intermediate stage, at which it is quite clear that the individuals, male or female, are determined to proceed in the nursing profession, might well be the time to look for a registration fee. I believe to ask for a registration fee at the commencement of a person's career could be discouraging to those who, perhaps, in the first instance could not afford it.

Mr. Pavitt: Has my hon. Friend any knowledge of conditions in industry? Does he know whether firms often pay the fees for their employees?

Mr. Dunn: I cannot call to mind any such cases at the moment. Like the hon. Member for Birmingham, Edgbaston (Mrs. Knight) I received the notification in regard to this Committee only yesterday morning, and the Bill this morning, with some other correspondence which was meant to advise me. Therefore, I am in similar difficulty and I am treading a careful path. However, I am sure my hon. Friend would be the first to recognise that there are few industries where one is required to pay a fee before taking up employment, and this is primarily a matter of paying a fee before being allowed to proceed with the employment.
11.30 a.m.
There is a delicate balance between professional registration, which is necessary, and the fact that there would have to be employment and that the profession is a very delicate one to follow. That balance will have to be looked at

carefully. I have no doubt that my hon. Friend the Member for Willesden, West will advise me upon this matter in due course, but I state my reservations in relation to Clause 7.
Another matter which we might look at with more care is how entitlement to vote is to be indicated. Perhaps it will be based on the qualifications people hold or the employment they follow. Perhaps my hon. Friend will enlarge on this point.

Mr. T. L. Iremonger: My hon. Friend the Member for Farnham (Mr. Maurice Macmillan) was quite right in saying that we on this side of the Committee would not object to the Bill in principle, principally because there is no principle in it. This is a Second Reading Committee, and the purpose of a Second Reading in the House of Commons is to discuss the broad principle of a Bill. As everyone has consistently said, this is almost primarily and exclusively a Bill of detail. Therefore, a Second Reading debate on it is a somewhat supererogatory exercise, although my hon. Friend most ingeniously managed to extend the scope of the debate into very wide questions of principle and general concern.
I agree that we should give the Bill a Second Reading, and send it to a Standing Committee, where the real business can be done of discussing the detail, which is extremely important, particularly to the nurses concerned. Although we are most obliged to the Under-Secretary for the great care with which he translated the Bill for us, it was a translation rather than an exegesis, and my hon. Friend the Member for Tynemouth (Dame Irene Ward) was quite right to say that it would be nice to have a little background explanation as to why changes in the constitution of the Council, and so on, are called for. We have not been greatly enlightened on the history.
My interest is in the psychiatric nursing side of the profession in so far as that is affected by the Bill. About a couple of years ago I introduced with the leave of the House, under the Ten-Minute Rule, a Bill to amend the Nurses Act, 1957. I hope that some of the points I there adumbrated may not be out of order on this Second Reading. My interest in the psychiatric side arises from the nature of


my constituency, Ilford, North, where there are three great institutions of which I am very proud. One is, of course, the hon. Member for Ilford, South (Mr. Arnold Shaw) who is extremely well served in the House—

Mr. Arnold Shaw: On a point of order, Sir Beresford. I question that statement.

Mr. Iremonger: The hon. Member is as well served in his Member of Parliament as I can possibly serve him. Perhaps my limitations in that respect are obvious. At any rate, I am very proud of him as one of the institutions. The second institution is Goodmayes Hospital, one of the great psychiatric hospitals of the world; and the third is Claybury Hospital, also a great pioneering psychiatric hospital and nursing hospital. I wish we could speak of "psychiatric nursing", but that term is governed by the National Health Act and we cannot amend it in this Bill.
Psychiatric nursing is of increasing importance. It is important to make a distinction between the nursing of psychotic and of neurotic patients. I believe that psychotic patients are on the way out; that the nursing of psychotics is something which, in measurable time, will no longer be necessary. I am quite convinced that the advances already being made in biochemistry will eliminate psychotic illness.
But I believe that neurotic illness will be with us for all time, possibly in increasing measure. I am informed that the difference between the psychotic and the neurotic is that the psychotic thinks that two and two make five, while the neurotic knows that two and two make four, and that is the hell of it. I believe the latter is something by which we shall continue to be increasingly depressed. In the meantime, the nursing profession will be of extreme importance in both psychotic and neurotic psychiatric disorder.
What this Bill does which affects the psychiatric nurses, is to touch on their status. It is very largely a matter of nomenclature, of the way they are described, and of the inclusion of the words "and care", which are taken by some as being slightly offensive when referring to mental and mentally subnormal nursing. I hope we may probe, and make some improvement at the Committee stage. It is an important matter, as is

the constitution of the Mental Nurses Standing Committee, which is provided for but not explained in detail in the Bill.
I hope that it might not be out of order for the Minister to explain what he has in mind to prescribe. There is in the Bill a certain amount which is to be arranged as prescribed. That wording always fills me with misgiving, since it usually means that we allow the details to be agreed in debate in the House and the prescription is then made by Order by which we have no means of amending, although we may oppose it.
It would be helpful for the nursing profession if in Committee it could be given some indication of the kind of constitution which is in mind for the Mental Nurses Committee. The detail is a matter for Standing Committee, not for a Second Reading Committee, and this is a Bill in which detail is all. As my hon. Friend has suggested, the Bill is a matter of fiddling while Rome burns—

Mr. Snow: Oh, come!

Mr. Iremonger: Well, no one can say that the condition of the nursing profession at the moment is entirely unanalogous to the burning of Rome, but that is perhaps a matter of principle into which we should not now go in detail. In so far as it is a matter of fiddling, some fiddles are important, and we must above all ensure that there is consultation with those who are to be most directly concerned. The hon. Member for Birmingham, Edgbaston (Mrs. Knight) may not have lost very much through not having been able to consult interested parties before this debate, but it is important that there should be the closest consultation by the Opposition before the Committee stage. I hope, therefore, that in the arrangement of business we will be given fuller opportunity to take the advice and counsel of those who are to be concerned, so that we can amend the Bill at a later stage.

Mrs. Knight: The adjectives used in describing this Bill are piling up in an interesting way. It was referred to by the noble Lady, Baroness Summerskill, as an innocuous little Bill, and one noble Lord described it as rather limited, rather tepid and rather sad. Another said it was small but useful. The hon.


Gentleman for Willesden, West (Mr. Pavitt) described it as an extremely important Bill, and my hon. Friend the Member for Ilford, North (Mr. Iremonger) said it had no principle in it—though I am perfectly sure that he did not mean that it was an unprincipled Bill. Nevertheless, what we have heard this morning rather indicates that this is a very technical matter but one in which Members on all sides of the Committee take very great interest.
Possibly that has something to do with its title. The words "Nurses Bill" rather indicate that it will be a Bill dealing with matters of great moment to nurses. While engaged on business to do with a by-election that is going on in Birmingham. I mentioned to one nurse that we would be discussing a Nurses Bill this morning. "Splendid," she said, "how absolutely wonderful!"—and before I could stop her she went on to tell me of all the things that are wrong with the nursing profession at this time. I am sure that the hon. Member for Willesden, West who said, I believe, that there were three nurses now for every two in 1948, would not say that that indicates that all is well in every part of the profession.
That nurse explained to me in great detail the many things that were worrying nurses at this time. It is not only a question of pay. There are many matters with which the General Nursing Council, as reconstituted under this Bill, might possibly concern itself. These include, for instance, discipline. I am sure all members of the Committee will have been appalled to read only last week that some nurses in a hospital were actually under threat of being sacked because they finished up some jelly that some patients had left. There are a great many things about which those in the nursing profession are concerned at the moment, and I give notice now that at a later stage I shall seek to move Amendments, particularly in relation to Clause 6.
I am forced soon to leave the Committee, so perhaps I may comment on just one or two points in the Bill. I very much welcome Clause 2, and the fact that it gives greater representation to mental nurses. This is very important, because mental nurses have not always been properly regarded. This provision greatly upgrades their status, and is im-

portent for that reason. The incidence of mental disease is increasing, so it is even more important that correct status be given to those who are nursing such patients.
On that same Clause I join with the hon. Member for Willesden, West (Mr. Pavitt)—what a happy thing it is that we are singing so sweetly in tune this morning; such an occurrence is not invariably the case. He is absolutely right in what he says about male nurses. In Clause 2(2)(b) it is proposed that of the elected members of the Council
… three shall be registered mental nurses elected by persons who, on the prescribed date, are registered mental nurses. …
But in a later Clause we note that Scotland is to have the benefit of having two registered mental nurses, a man and a woman.
This point was taken up in another place, when we heard from a noble Lady that the General Nursing Council for England and Wales had asked that this should be so. With the greatest respect to the Minister, that will not be quite good enough for us. We will want to make sure that others besides the General Nursing Council are happy on this point. It is very important that the status of male nurses, many of whom have the difficulty of supporting a wife and family on a very limited income, should be properly regarded, and that proper attention should be paid to them in all respects.
My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) was right to question whether the Enrolled Nurses are happy about the point dealt with in Clause 5. We shall want to know.
When I intervened at the beginning, Sir Beresford, I did not mean in any way to be awkward, and I have had a measure of support from members of the Committee. Although, as you said, we heard about this Committee on Wednesday, this gave us only a very short time to make ourselves familiar with an immensely technical bill. It is not an unreasonable ambition to wish to understand the Bill fully even in discussing it on Second Reading. It cannot be a desirable for members of the Committee not to understand what they are discussing—

11.45 a.m.

The Chairman: Order. I fully appreciate what the hon. Lady is saying but, if I may respectfully say so, she is doing very well despite the short notice.

Mrs. Knight: I intend to speak briefly on Second Reading. The debate has shown that there are many unanswered questions to which we shall seek answers.

Mr. Snow: I ask leave, Sir Beresford, to speak again. Like other members of the Committee, I was lost in admiration for your tolerance when certain matters affecting pay, which does not come within the Bill, were raised and discussed. I will confine my remarks to salient points which have been made. Many of the points raised were Committee points; none the less important for that, but they are points of some detail on which I wish to take further advice.
The hon. Member for Farnham (Mr. Maurice Macmillan) surprised me, as did the hon. Member for Tynemouth (Dame Irene Ward), by saying that I had not underlined the reasons behind the promotion of the Bill by the General Nursing Council through the Government. I accept some blame for not making the position perfectly clear. State Enrolled Nurses for the first time will be represented on the General Nursing Council, in recognition of their valuable work. I like to think of this as the first of a number of steps to be taken in the future.

Dame Irene Ward: I fully accept this new facility but it does not necessarily mean that State Enrolled Nurses will have sufficient power. There must be a great deal more than a first time representation on the Council. One needs to know that State Enrolled Nurses will have power to put forward their views in conjunction with the other members of the General Nursing Council. We want this step forward to be a real step; there is a lot of difference between a step and a real step.

Mr. Snow: From my experience of meeting nurses collectively and individually, my impression is that, in common with the hon. Lady, they are perfectly well able to look after themselves. The hon. Lady is possibly under-estimating this first step. It is not a threatened weakness, since I am certain that State

Enrolled Nurses will be able to expound their viewpoint adequately. If the facilities are found to be inadequate, the Minister's rôle is to see that provision is made for their point of view to be adequately represented.
Several hon. Members, including the hon. Member for Farnham, have referred to the word "care" in relation to mental nursing. The explanation is that a responsibility for environmental aspects attaches to mental nurses which goes beyond strictly nursing responsibilities. The mental nurse, as opposed to the ordinary nurse, has to try to provide a homely atmosphere for the patients. It seems to us that we should, therefore, attach this word "care" and I do not think this is a matter of considerable controversy within the profession.
The question of fees, which was raised by the hon. Member for Farnham, will be discussed in Committee. In speaking of two registration fees, he was probably referring to the enrolment fee and to the fee payable during training. I remind him and other members of the Committee that, under the terms of the report on nurses' pay of the National Board for Prices and Incomes, we are committed to a review next March, when these matters can be taken into account.
I was a little disturbed about one aspect of the speech of my hon. Friend the Member for Liverpool, Kirkdale (Mr. Dunn) relating to the payment of fees by the employer. He was interrupted by my hon. Friend the Member for Willesden, West (Mr. Pavitt), who drew his attention to the practice in commerce. It is my understanding that the nursing professions are extremely jealous of their independence and would not wish to be subsidised, thereby probably losing some of their independence.

Mr. Pavitt: I was referring more to professional people like architects and surveyors, who serve for many years with local authorities and pass stiff examinations. If they do well, very often the local authority, and in some cases the National Health Service, will agree to the payment of fees to certain grades, but there is no such provision for nurses.

Mr. Snow: There are many professional bodies associated with the medical profession. The General Medical Council, the General Dental Council, the


General Optical Council and the Council for the Professions Supplementary to Medicine, all levy fees in this way, but this matter can be discussed in Committee.
I was asked whether the Bill could be put into operation before the 1970 elections. I am advised that this is a difficulty, but it is expected that it will be possible.
My hon. Friend the Member for Willesden, West raised the important matter of the rôle of male nurses, especially in psychiatric medicine. I share with him his anxiety that they should be able to participate in consultations and be given an opportunity to put forward their views on all questions, not only on pay. I recognise the immense contribution which they make to mental nursing.
My hon. Friend asked for a debate on the wider aspects of nursing. That is not a matter for me, but I think that it is very desirable, bearing in mind what may in due course be considered by the N.B.P.I. He also referred to what was omitted from the Bill, but the Bill is fairly limited, designed to provide a structure of consultation through the General Nursing Council, and it does what it sets out to do. The Bill is relatively modest, but the whole question of the position of nurses in society and the recognition of their status is a matter which I agree could at this time be usefully reconsidered.
I have been entertaining myself during my lunch hours by rereading the debates in March and May of 1962. Not the least amusing and interesting speeches were those made by the hon. Member for Tynemouth. I pay tribute to her in that she is consistent in her criticism of the powers of the Government in relation to the nursing profession. I commend to all members of the Committee the reading of those two debates.
To return for a moment to male nurses, the composite rôle of mental nurses, male or female, is now recognised as not necessarily entailing separate representation. This is illustrated by the Society of Male Nurses winding up, it no longer having a special function to perform. This feeling is not entirely shared in Scotland.
The hon. Member for Tynemouth has always been critical about the consultative aspect with Government, which is endemic in the nursing profession. As

she said on more than one occasion in 1962, she is not very much in love with the Whitley system. My information is that the State Enrolled Nurses have been consulted about this Bill. The body which has in membership the largest number of S.E.N.s is the Confederation of Health Service Employees, which supports the Bill. There has also been consultation with the National Association of State Enrolled Nurses. This organisation had some reservations but, on the whole, it accepts the Bill as it is. Its main concern was about representation on the Education Committee and this we could with advantage consider in Committee.
My hon. Friend the Member for Liverpool, Kirkdale referred to election procedures on the G.N.C. This is within the domestic responsibility of the G.N.C., but at a later stage I shall try to elicit some information, without encroaching on its preserves, since I realise that, as we represent the public, it is a matter about which we should satisfy ourselves.
The hon. Member for Ilford, North (Mr. Iremonger) momentarily and uncharacteristically aroused my ire when he dramatised what he believed to be the parlous condition of nursing and nursing recruitment generally. I commend to him the rereading of the proceedings in 1962, not because matters are the same as they were in 1962, but because I believe that the development and the improvement in status of the nursing profession is a continuing process, and that no Government of whatever complexion can afford to let up on it.
I am indebted to the hon. Gentleman for pointing out the important rôle which has been played by Goodmayes Hospital. As he knows, I am in consultation with him and with my hon. Friends about the location of that hospital. It would be a great pity if we did not satisfy ourselves that there had been adequate local consultation, and for that reason the Secretary of State has given an undertaking that there will be consultations, both with the hospital authorities and with professional bodies at an early stage, on any proposals by the regional board to change the location or structure—

Mr. Iremonger: Might I just clarify what the hon. Gentleman is saying? The discussions which we hope to have will be about the siting of the district


general hospital on the site occupied by the existing mental hospital. I am sure that he did not mean to convey that there was any question of resiting the existing Goodmayes Hospital.

Mr. Snow: I let myself in for that. If I may be permitted to say so, the location is a separate issue. We are seized of the importance of consultation with professional bodies at an early stage, quite apart from consultations with those who are in charge of administration.
The hon. Member for Birmingham, Edgbaston (Mrs. Knight) has unfortunately been obliged to leave us but I take account of her remarks about earlier advice of this morning's proceedings. However, if she is fortunate enough to be a member of the Standing Committee, no doubt she can raise these points.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:


Craddock, Sir B. (Chairman)
Macmillan, Mr. Maurice


Armstrong, Mr.
Millan, Mr.


Boardman, Mr. H.
Pavitt, Mr.


Dunn, Mr.
Royle, Mr. A.


Harrison, Mr. Brian
Shaw, Mr. Arnold


Iremonger, Mr.
Snow, Mr.


Jones, Mr. J. Idwal
Ward, Dame Irene


Knight, Mrs.

In my view, we can focus two points which are worthy of attention in this not unimportant Bill. The first is the improved representational position proposed for State Enrolled Nurses. They must not be regarded as second-class nurses; they are in a different type of career. Second is this radical change, which I think has been under-emphasised this morning, that subnormality, as a separate branch of nursing, is now formally recognised and must be represented in the structure of the Council.

Question put and agreed to.

Ordered,
That the Chairman do now report to the House that the Committee recommend that the Nurses Bill [Lords] ought to be read a Second time.

Committee rose at Twelve o'clock.